Blackstone Offers €3bn+ for Santander’s Ciudad Financiera HQ

10 September 2018 – El Confidencial

Santander’s Ciudad Financiera, the operating headquarters of the bank chaired by Ana Botín in Boadilla del Monte (Madrid), is being put up for auction five years after its owner, the company Marme Inversiones 2007, owned by several investment funds, filed for bankruptcy. After an arduous legal process whereby the bankruptcy administrator and the court managing the liquidation has released the asset, the central offices of Spain’s largest financial institution have been put on the market in search of a buyer.

According to financial sources close to the process, one of the most interested parties is Blackstone, the US hedge fund that has become Santander’s largest real estate partner after it purchased half of its portfolio of toxic assets last year. The US fund is negotiating the finishing touches for the presentation of its offer for the building where the bank employs almost 7,000 employees, including the office of the President, Ana Botín. According to the same sources, Blackstone is debating whether to participate in the auction by itself or to team up with the other creditors that supported the purchase of the Ciudad Financiera in 2008.

Of those, the presence of ING, HSH Nordbank, CaixaBank and Bayeriche Landesbank stand out, which 10 years ago granted a €1.575 billion loan to Propinvest to acquire Santander’s largest real estate asset on a “leaseback” basis. Other entities also participated in that loan including Deutsche Postbank, Royal Bank of Scotland and Raffeisen Zentralbank, which in 2011 started to sell its stake in the loan to vulture funds at significant discounts on the nominal value, when the owner started to realise that it could not afford to pay the debt.

One of the players that purchased that debt was Blackstone, together with other similar funds, such as Centerbridge and Avenue Capital. According to other sources, those investors are seriously considering submitting a joint offer on 17 September, the date on which the interested parties have to appear before the judge. That date is the one that has been set for the binding offers for all of the assets to be processed. If none are received, which is unlikely, then the Ciudad Financiera will have to be split up and sold off piecemeal.

According to these sources, Blackstone is now the main candidate, after two Arab groups placed tentative offers on the table that never proved successful due to legal wrangling and the lawsuits filed by some of the creditors, such as the Iranian Robert Tchenguiz. The investor, who owns several properties in London and is known for his idle lifestyle, was another person to take advantage of Propinvest’s bankruptcy to acquire debt at low prices and whereby become a significant creditor. Nevertheless, his problems with the Law – he ended up being arrested – have ruled him out of the process to take ownership of all of the Ciudad Financiera.

Arab interest

The player that came very close to acquiring Santander’s headquarters was AGC Equity Partners, a Kuwaiti fund with €3 billion under management, which received approval from Mercantile Court number 9, which was leading the bankruptcy of Marme. But its bid, which amounted to €2.5 billion, now needs to be updated, given that, according to various sources, the debt alone of the special purpose vehicle reached €2.8 billion, including senior and mezzanine. Therefore, the offers must exceed at least €3 billion, which means that this auction is going to turn into one of the largest real estate operations of the year.

The attempt by AEG, which was suspended when Ana Botín exercised the right of first refusal over Ciudad Financiera, came at the same time as the bid from Aabar, a company from Abu Dhabi, owned by IPIC, the owner of Cepsa, now renamed Mubadala. According to those sources, that fund is no longer interested in the auction and Santander has no intention of exercising its preferential right, as acknowledged by official sources at the Spanish entity.

The main attraction of Ciudad Financiera is that Santander, which financed the first operation with a loan amounting to €304.6 million to pay the VAT on the purchase, has committed to remain as the tenant of the property for the next 40 years, which means that the rental income is guaranteed.

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

Asur’s Two Hotels Go Up for Auction for €70M

30 November 2017 – ABC

The judge of Mercantile Court number 2 in Sevilla, Pedro Márquez, has approved the liquidation plan for the company Ámbito Sur Hoteles (Asur), which includes the direct sale, by auction, of the two production units associated with the four-star hotels that the company owns in La Línea de la Concepción (Cádiz) and Isla Antilla (Huelva). Both are operated by the chain Ohtels. Asur, which also owns land in Manilva as well as 81 tourist apartments in La Línea, filed for liquidation after accumulating debt of €90 million, most of which corresponded to loans from Banco Popular (now Santander), Cajasur, Sabadell and Sareb (the so-called bad bank).

The Hotel Asur Campo de Gibraltar and its adjacent car park are worth €21 million, although the debt associated with that production unit amounts to €20.7 million, mostly loaned from Cajasur. Meanwhile, Hotel Asur Islantilla Suites & Spa has an asking price of €48.7 million and that is offset by loans amounting to €41.5 million, of which €38 million was initially granted by Banco Popular (now Santander). That hotel also houses a conference centre.

Although several creditor banks made a request for the mortgage debt over the hotels to be foreclosed, the judge from the Mercantile Court has ruled for them to be sold as separate production units, relegating the mortgage foreclosure to a subsequent time if the auction is abandoned (…).

The bankruptcy administrator, in the hands of the law firm Maio Martínez Escribano, will receive offers for the hotels and the two plots of land in Manilva until 16 December. If by then it has not received any offers for more than 75% of the real value of the estates, then the period for the submission of offers will be extended by one month, to 16 January.

If an offer is received for less than 75% of the real value of the hotels, the main creditors (Cajasur in the case of the hotel in Campo de Gibraltar and Santander in the case of the hotel in Islantilla) will have to approve the operation. The bankruptcy administrator will have the power to choose the most favourable offer without having to obtain legal authorisation for the sale.

In the event that the two hotels are not sold directly through this first auction, the sale will be undertaken through a specialist entity, such as a real estate consultancy firm, which will be granted a five-month period to that end. If that sales option also fails, a “dación en pago” of the properties will be carried out. Only in the event that the hotels cannot be sold in that way either will the properties be auctioned off individually and not as production units.

The history of Asur

The company Asur was created in 2010 by the Basque group Bruesa Construcción and the Nazarene real estate company Baremos Área Inversiones (…).

Original story: ABC (by M. J. Pereira)

Translation: Carmel Drake

Reyal Urbis’ Liquidation Process Begins

6 September 2017 – Expansión

Three months after receiving the “No” decision from its creditors to its payment proposal, the real estate company Reyal Urbis is starting its liquidation process, with Sareb, the Tax Authority and several banks, such as Santander, as the main beneficiaries.

On Monday, the property developer controlled by Rafael Santamaría received the ruling from Mercantile Court number six in Madrid, ordering the launch of the liquidation phase. In this way, Reyal Urbis will star in the second largest bankruptcy in Spain’s history, with debt amounting to more than €3,500 million, exceeded only by that of Martinsa Fadesa.

This new phase will be led by the bankruptcy administrator, given that the judge is continuing to suspend the managers of the company and has ordered the termination of its corporate governance bodies.

Since its appointment as the bankruptcy administrator in February 2013, the audit firm DBO has taken care of the company’s legal proceedings. It was responsible for submitting the payment proposal prepared by the company for its creditors, which included discounts of more than 90% on its liabilities. Only 32.7% of its shareholders supported that payment plan in June, which effectively condemned the company to extinction.

Now, the administrations will have to determine the best solution for the creditors, which are owed around €3,600 million, according to the most recent figures presented, whilst the company owns assets worth €1,170 million as at 31 December 2016.

Portfolio

The company’s assets include €188 million corresponding to properties that generate rental income and €863 million relating to around 200 finished homes and land. Specifically, Reyal Urbis owns one of the largest land portfolios in Spain, with 6.7 million m2, exceeding the large property developers such as Metrovacesa (6 million) and Neinor Homes (1.3 million).

Distributed over more than 30 cities in Spain and Portugal (the company owns assets in Lisbon and Porto), the portfolio of land and rental assets, such as the best-located hotels in the Rafael Hoteles chain, as well as its stake in the Castellana 200 retail and office complex, will be the jewels in the crown to be shared out amongst the creditors or sold to allow them to recover at least some of their investment, according to sources close to the process.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

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

In Tempo: Bankruptcy Administrator Rules In Favour Of Sareb

17 January 2017 – El Mundo

The bankruptcy administrator of Olga Urbana, the property developer of the In Tempo skyscraper in Benidorm, whose future is being decided by the courts, is clear in its findings: neither Abanca (previously Caixa Galicia) nor Sareb (the bad bank) were administrators of the bankrupt company and therefore, neither of them were responsible for the management that led the company to suspend its payments after it accumulated debt amounting to €137 million.

In this way, the position of the bankruptcy administrator, Antonia Magdaleno, who has presented her conclusions about the In Tempo case before the Mercantile Court of Alicante, which is instructing the process, represents a lifeline for the interests of Olga Urbana’s major creditors, above all for Sareb, which is hoping to repossess the property and subsequently sell it to recover some of its debt, which amounts to around €107 million.

Magdaleno considers…that Sareb’s debt should be ranked as special privilege, which would place it at the front of the queue when it comes to receiving proceeds once the building is sold. By contrast, the small creditors, who initiated this bankruptcy proceeding, maintain that Abanca and Sareb did act as administrators of In Tempo’s developer, and therefore that their loans should be considered as subordinated, which would force them to the back of the queue when it comes to receiving any proceeds, whereby allowing the other creditors to recover their loans first.

Magdaleno reminded the Court that construction of In Tempo, the tallest residential skyscraper in Spain, was suspended in 2010 by which point Olga Urbana had used up the entire loan – amounting to €90 million – granted to it by Abanca, something which the small creditors deny. This group of creditors (the construction company Kono, Isidro Bononat – a shareholder of Olga Urbana – and the architect Roberto Pérez Guerras) say that Magdaleno’s investigations have not been independent. (…).

Sareb, which took over the loan that Abanca had previously granted to Olga Urbana, maintains its claim against the Attorney General’s office in which it accuses Olga Urbana of “alleged diversion of funds and company links between owners and administrators of the company and some of their own contractors and suppliers”. The entity calculates that €23 million was diverted.

Similarly, the bankruptcy administrator argues that the fact that Sareb requested the necessary bankruptcy of Olga Urbana “does not represent another example of the bad bank’s involvement in the administration of the business, but rather represents a standard option open to all creditors when a Board of Directors is not fulfilling its duties”. Magdaleno is categorical in this respect. “There is no proof whatsoever that allows us to conclude that first Abanca and subsequently Sareb, carried out any functions akin to those of a real company administrator”. The judge will have the final word.

Original story: El Mundo (by F.D.G.)

Translation: Carmel Drake

Martinsa Fadesa Puts Batch Of Assets Up For Sale For €67M

5 October 2016 – Expansión

Martinsa Fadesa’s bankruptcy administrators have put a new batch of assets up for sale, under auction. The portfolio include estates, plots of land and even, several golf courses, with a combined value of, at least, €67 million. The deadline for the submission of offers will close on 3 November.

Specifically, the real estate company, which has filed for liquidation, has put the company Casasola Explotaciones Agropecuarias up for sale – it is an associate of the Martinsa Fadesa Group and the holding company owns a 48% stake in it – for a minimum price of €32.5 million. This company is the owner of several estates in the province of Valladolid, according to the website that has been created to provide information about the company’s liquidation.

In addition, the real estate company, which was controlled and chaired by Fernando Martín, has put Urbanizadora Club de Campo de Logroño up for sale, whose assets include plots of land and homes in Sojuela (La Rioja) as well as the Real Club Náutico de Sanxenxo, for minimum prices of €8.6 million and €162,000, respectively.

Meanwhile, the company has launched an auction for Guadalmina Golf, a company in which the holding company holds a 31.82% stake and whose main activity is the operation of three golf courses (two 18-hole courses and one 9-hole course), in the municipality of Marbella (Málaga). The minimum price to participate in the bid is €7.95 million. Martinsa Fadesa also wants to sell Inversiones Inmobiliarias Rústicas y Urbanas 2000, owner of an estate in El Molar (Madrid), for a minimum price of €17.9 million.

Martinsa Fadesa was declared insolvent in July 2008, with debt amounting to €7,000 million. The liquidation process began before the summer of 2015 after a court agreed months earlier to open this phase of the process for the real estate company and another five debtor entities.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Martinsa’s Liquidation Progresses & May Close In 2017

6 June 2016 – Expansión

The liquidation of Martinsa Fadesa may be finalised in 2017, once the creditors have been returned the “present value” of the assets they financed, according to sources close to the process.

The current bankruptcy administrators of the company have put Martinsa’s assets, worth €225 million, up for sale and have completed sales amounting to €25 million. The jewels in the real estate company’s crown include a group of buildings and plots of land in Paris, as well as assets located in Poland and Morocco.

Discounts of 30%

The liquidation of the company, which was one of the country’s largest companies during the years of the real estate bubble, includes the sale of assets with discounts on their book values of around 30%. It also includes the auctioning off of assets and the allocation of those unsold assets to creditors so that they may choose whether to carry out the “dación en pago” of the debt or approve the sale of the asset by the bankruptcy administrator in exchange for cash.

According to the sources, although the assets are the same ones that were financed at the time of the takeover bid, the decline in the real estate market in Spain has affected their initial values.

Nevertheless, they consider that the creditors may recover their investments over a time horizon that mirrors the recovery of the Spanish economy and of the real estate sector. In fact, they say that some assets have been sold above their book values.

Original story: Expansión

Translation: Carmel Drake

Holiday Inn Bernabéu Files For Bankruptcy

20 April 2015 – Expansión

Madrid / The hotel, which continues to be operational, filed for voluntary bankruptcy at the beginning of this year in order to renegotiate its debt.

Leading Hospitality, the company controlled by the businessman César Losada, which owns the Holiday Inn Madrid Bernabéu hotel and the Hotel Maza in Zaragoza, has filed for bankruptcy to try to restructure its debt and forge ahead (with its business). On 13 January, Leading Hospitality voluntarily adopted this legal status and almost a month later, Commercial Court no. 9 in Madrid declared the procedure open, according to the company’s annual report for the financial year 2014.

Gregorio de la Morena, managing partner at DLM Insolvia, has been appointed as the bankruptcy administrator, although Losada and his team continue to manage the hotel, which is still operational. Sources close to Losada explain that the company filed for bankruptcy because “it had cash flow problems, which prevented it from meeting its short-term debt commitments”. Nevertheless, the intention is that the company will avoid filing for liquidation and instead reach an agreement with its creditors and continue operating.

For the time being, the company is waiting for the bankruptcy administrator to prepare the list of creditors to start negotiations. In addition, Leading Hospitality expects to file a collective dismissal plan (‘expediente de regulación de empleo’ or ERE) to reduce its wage bill – the scope of (that agreement) is being negotiated with the bankruptcy administrators. The hotel employs around 150 people.

In 2013, Leading Hospitality recorded revenues of €7.33 million, but it generated a negative operating profit of -€2.32 million. Net losses reached -€1.92 million and last year, the company also ended the year in the red.

Debt

At the end of 2013, the company had long-term debt amounting to €7.62 million and short-term debt amounting to €1.55 million, as well as several mortgage loans on both of its hotels – with Bankinter over its property in Madrid. Staff salaries and compensation payments amounted to €4.17 million in 2013.

In the accounts for that year, approved in December 2014, the auditor warned that the company was experiencing on-going cash flow problems (to be able to afford to pay) its employees, suppliers and financial partners. And it pointed to the management team’s plan to continue the refurbishment of the hotel, which it says is worth €27 million, and reduce the number of staff.

At the end of 2012, the businessman César Losada became the majority shareholder in the Madrid hotel, after acquiring a 51% stake from the InterContinental Hotel Group (IHG). Losada, who is behind the hotel investment company Losan Hotels World, invested €22 million in the acquisition and refurbishment of the four star hotel, which has 313 rooms. The asset is also owned by other individual shareholders and Losada intends to acquire their respective stakes (over time). Following the change of ownership in 2012, the hotel retained the Holiday Inn brand, which is owned by IHG, though a 25 year franchise contract. In 2013, Leading Hospitality paid a €363,754 fee to IHG.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Disagreement Between Tax Authorities And 4 Top Banks Over Nozar’s Future

10 March 2015 – Expansión

Two camps have been established in the lengthy bankruptcy process involving the real estate company Nozar. The company, which operates food and hotel companies, in addition to its real estate business, is awaiting the court’s decision as to whether to accept or reject the proposed agreement presented at the end of last year.

This proposal has the support of 30 creditors, which together hold 73.73% of the senior loans and almost 70% of the ordinary loans. The creditors include entities such as Bankia, Banco Sabadell and Hypothekenbank, as well as companies such as Colonial and the Tax Authorities.

Nevertheless, another four financial creditors (BBVA, Popular, CaixaBank and Santander), together with Nozar’s bankruptcy administrators, have expressed their opposition to the proposal. Barclays has decided to abstain.

The confrontation between Nozar and the two bankruptcy administrators has led the company to file a criminal complaint against them. In turn, the administrators, together with the four Spanish banks, are calling for the liquidation (of the company).

The origin of this confrontation stems from a series of agreements that Nozar reached with its creditor banks before it filed for bankruptcy and which caused it to reduce its debt from €3,500 million to around €1,500 million. The bankruptcy administrators estimate that these financial creditors should return around €110 million to Nozar through rescissory actions. Nevertheless, the administrators abandoned the recovery of around €62 million.

Instead, Nozar understands that this figure is much higher and that BBVA, Popular, CaixaBank and Santander should repay €500 million that was (previously) distributed to the creditors. Therefore, the bankruptcy administrator of Dimora Gestión, the company created by Nozar, which is in turn a creditor, has claimed €479.4 million from these entities.

The Tax Authorities, which are owed €200 million, claim the payment of VAT on these rescissory actions; a payment that has been postponed by many real estate companies during the crisis. The creditors that have signed up to the bankruptcy agreement support the formula that once the €500 million from the rescissory actions has been repaid, then €50 million should be paid to the Tax Authorities and the asset shall be distributed based on the debt held by each one.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake