Sabadell Seeks Approval From Creditor Banks To Buy Duro’s HQ In Madrid

17 November 2017 – El Comercio

Banco Sabadell has provided a solution to unblock the complex situation that Duro Felguera finds itself in. With its proposal to purchase the building that houses the Madrilenian headquarters of the Asturian group, the firm has a glimpse of the possibility of definitively unblocking the negotiations between the company and the creditor bank.

Duro has already approved the sale of the aforementioned property to Sabadell. Now the rest of the banking pool just needs to give its approval to the purchase of the building, for which the financial entity will pay between €30 million and €33 million. If this happens, according to sources familiar with the process, the operation could be signed as early as next week. Without further ado. Because time is running out for the Asturian engineering company.

From the sale of the Madrilenian building, Duro would record revenues of €10 million, a deposit that would serve as an emergency guarantee so that, in turn, the creditor banks could release the rest of the avals, amounting to up to €31 million. In this way, the Asturian group would be in a situation to start entering into contracts once again.

It is precisely the lack of avals that has forced the Asturian group to withdraw recently from four projects, with a combined total of €918 million: the Río Grande and Novo Tempo electricity generation centres in Brazil; the LNG terminal for Octopus LNG in Chile; and the hydrocarbon storage terminal for Vopak in Panama. On Tuesday, the company itself acknowledged in a statement presenting its results to the CNMV that “the risk is limiting (the winning of) new contracts and is making it hard to push ahead with projects in the portfolio”. In this way, it justified the losses recorded during the first nine months of the year, which amounted to €11.4 million.

Although it is still pending approval from the other creditors, Sabadell’s proposal for Duro’s Madrilenian building has won favour over the other offer, presented by Sandra Ortega, the eldest daughter of the founder of Inditex, who offered a higher amount: €38 million, but on the condition that the Asturian group remain in the property as the tenant for at least three years.

The option proposed by the financial entity, which operates under the brand Sabadell Herrero in Asturias, is more aligned with the interests of the engineering company, given that the group is also negotiating the sale of the two subsidiaries that work in the building in Madrid.

Although they acknowledge that it is still early days, the firm intends to divest Núcleo Comunicaciones, a division acquired in 2011, which specialises in the defence and air, maritime and environmental control; and Epicom, a firm that has 40 employees for which Duro paid €4.6 million in 2013 and which specialises in the development of security and defence software. Núcleo’s workforce comprises 170 professionals (…).

Leasing operation

In any case, both divisions may continue to occupy the building in Madrid for as long as they form part of Duro Felguer. According to the sources consulted, Sabadell intends to sign a leasing arrangement to allow the Asturian group to continue operating in the property (…).

Original story: El Comercio (by Susana Baquedano, O. Villa and C. Tuero)

Translation: Carmel Drake

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