The Courts Award Hotel Silken ‘Puerta De America’ To BALMI

21 March 2017 – El País

Commercial Court number 1 in Vitoria has awarded the Hotel Silken Puerta de América Autonomous Production Unit (UPA, comprising the assets, rights and obligations, workers, contracts and administrative licences, to Farmington Investments, S.L., a Spanish company headquartered in Madrid and owned in its entirety by Bank of America.

According to the magistrate’s ruling, dated 10 October 2016, the price of the hotel’s Autonomous Production Unit is €16,320,000, of which €326,400 corresponds to the organisation of the on-going business activity and the remainder to the two properties and their mortgaged facilities and furniture. Farmington Investments will pay €8,132,338.97 by way of consideration and €8,187,661.03 by way of transfer into the account that the bankruptcy administrator designates for inclusion within the active mass of the bankrupt Hotel Puerta de Castilla, S.A..

The loans that Bank of America Merrill Lynch Limited (Balmi) holds with the bankrupt company (approximately 51% of the bankruptcy liability) will be waived, with the exception of one sum, amounting to €8,132,338.97, which will be offset by the purchase price of €16.32 million. The acquiring contractor subrogates the Autonomous Production Unit in the contracts and administrative licences, as well as in the employment contracts for affiliated personnel, in accordance with the list contained in the hotel liquidation plan. (…).

The trading company Hotel Puerta de Castilla S.A. was declared bankrupt, along with other companies, by a ruling dated 8 July 2015 (Ordinary bankruptcy 374/15), and was subsequently accumulated into ordinary bankruptcy 512/14 of the companies Grupo Urvasco, S.A. and Grupo Hotelero Urvasco, S.A. The final texts were submitted on 18 March 2016, and on 5 May 2016, the liquidation notice was enacted. The bankruptcy administrator submitted the liquidation plan for the bankrupt companies on 20 June 2016, and that is currently pending approval. On 19 July 2016, the bankruptcy administrator submitted a letter evidencing the offer to acquire the Autonomous Production Unit (UPA) ‘Hotel Silken Puerta América’, issued by Farmington Investment, S.L., which had been accepted and approved by Bank of America Merrill Lynch Limited (Balmi), valuing it positively and explaining the reasons why the foreclosure should be carried out without any further delay and without waiting for the approval of the liquidation plan.

For the magistrate, “there is no doubt that the offer is extremely interesting” for the insolvency, given that the acquiring party subrogates the bankrupt company in almost all of the contracts signed by the latter in relation to the hotel and the transfer of all of the workforce, which ensures the continuity of activity, as well as the on-going employment of the workers. (…).

Original story: El País

Translation: Carmel Drake

San José Will Surrender 35% Of Its Capital If It Fails To Repay Loan

25 June 2015 – Bolsa Manía

San José will surrender shares representing up to 35% of its total capital to a group of six banks to repay a €100 million loan, in the event that it fails to repay said loan before its maturity date in October 2019.

The entities that have signed this loan agreement are: Banco Popular, Barclays Bank, Bank of America Merrill Lynch, Deutsche Bank, Sareb and KutxaBank.

To this end, San José’s shareholders’ meeting has approved the issue of “warrants” in favour of these entities. These warrants are securities that include the option to subscribe to shares in the company to offset any debt.

The loan linked to these warrants is one of the tranches that San José restructured after it reached a refinancing agreement at the beginning of the year. This agreement already required the surrender of its entire real estate division to the banks to repay the majority of its liabilities (€1,329 million).

The rest of the debt (€297 million) was divided into three tranches, one of which provides for the repayment of the liability in the event of non-payment of the loan on the maturity date, in four years time.

San José subjected its refinancing agreement to a judicial homologation process, in order to extend the agreement, reached with the majority, to all of its creditor entities.

Thus, Sareb and KutxaBank are included in the agreement and will have “warrants” even through they rejected the restructuring agreement, according to the shareholder documentation provided by the construction, services and renewable energy group.

New growth phase

In its presentation to shareholders, San José said that this refinancing agreement adapts the maturity dates to the cash flow streams and provides the company and its subsidiaries with sufficient financing lines to properly perform their activity and embark on the new growth phase.

The company highlighted the increase in its international business, which now accounts for more than half (59%) of total revenues, and the prevalence of its non-residential construction works, which dominate 87% of the business.

The shareholders of the company led by Jacinto Rey also agreed to appoint José Manuel Otero Novas as an external director of the company.

Original story: Bolsa Manía

Translation: Carmel Drake