Sareb Rejects Reyal’s Proposed Payment Plan

1 June 2017 – Expansión

Reyal Urbis has taken another step closer to the precipice. Sareb, its main creditor, has voted against the agreement presented by the property developer to circumvent its liquidation. Yesterday, the deadline set by the judge for Reyal’s creditors to sign up to the proposed agreement came to an end and, according to market sources, the public company has rejected the plan submitted by Reyal Urbis, which filed for bankruptcy four years ago.

Sareb, the real estate company’s main creditor, with debt amounting to €1,000 million, had already expressed its doubts regarding Reyal’s payment plan. In the end, it has opposed the plan because it considers that the proposed discounts (on the debt), of between 88% and 93%, are too high and that the proposal to free up assets that are securing certain loans only serve to benefit Rafael Santamaría, the company’s President and majority shareholder.

Reyal’s other major creditors include Santander and funds such as Värde Partners, which are now working to find out the current value of the company’s assets, with a view to its possible liquidation. The US fund has been acquiring some of Reyal’s debt from overseas entities over the last few months and is now negotiating the purchase of more land, as Expansión revealed on 22 May. Värde’s aim is to take ownership of some of the real estate company’s plots of land and whereby strengthen its commitment to Spanish property, which has led it to buy Vía Célere and Aelca in recent times.

Another key player in the creditor pool is the Tax Authority, to which Reyal Urbis owes more than €400 million. The real estate company has offered to pay this debt using the funds it obtains from the sale of its assets, but it is proposing a very long term horizon.

At the end of 2016, Reyal Urbis’ liabilities amounted to €4,660 million and the group had negative own funds of €3,449 million. The assets, most of which are plots of land to be developed, were worth €1,170 million and its annual revenues amounted to less than €9 million. Reyal Urbis was created in 2007 following the merger of Reyal, led by Santamaría, and Urbis, the real estate arm of Banesto.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

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