Tag: bankruptcy

Sareb’s Puts Sanahuja Family’s Land up for Auction to Recover the €13M Debt it Owes

20 April 2018 – Eje Prime

A new setback for the Sanahuja family. The Company for the Management of Assets proceeding from the Restructuring of the Banking System (Sareb) has decided to foreclose six plots of land in Madrid owned by the Catalan family by means of a judicial auction with the aim of recovering the €13 million owed to it by the clan.

Five of the plots are located in Vicálvaro and the other one is in Getafe. For the latter, Sareb has set a starting price of €12.7 million, whilst for the plots in Vicálvaro, the bad bank is asking for between €2.5 million and €5.7 million, depending on the plot for sale, according to El Confidencial.

The Sanahuja family were the kings of the Spanish property sector during the era of the real estate bubble, above all, after climbing to the Presidency of Metrovacesa, the listed property developer of which they became the majority shareholders. Afterwards, Román Sanahuja (pictured above), the patriarch of the family, led the company to bankruptcy.

Now, the clan has accumulated a debt of €44 million with the Tax Authorities, according to the most recent list of large debtors published by the public ministry led by Cristóbal Montoro.

The assets auctioned are owned by the companies Parque Residencial Vicálvaro and Sanahuja Escofet Inmobiliaria, both of which are, in turn, owned by Román Sanahuja, his wife, Ana María Escofet Brado, and their two sons, Juan Manuel and Javier.

Similarly, the string of bad news has not stopped for the family in recent times. A few months ago, Javier Sanahuja was evicted from the home that he lived in in the exclusive Barcelona neighbourhood of Sarrià. In Madrid, the patriarch of the clan, Ramón, founder of Sacresa, the seed of the Sanahuja family’s real estate empire, lost the Saldaña Palace, located on Calle Ortega y Gasset. Oddly enough, that prime property was purchased by the Catalan businessman from Juan Antonio Roca, one of the brains behind the Malaya corruption case.

Original story: Eje Prime

Translation: Carmel Drake

In Tempo’s New Owner will Put its Apartments on the Market this Summer

17 April 2018 – Levante EMV

The new owner of the In Tempo building in Benidorm, the firm SVP Global, is planning to finish the building work over the next 12 months and start marketing the 269 homes this summer. SVP Global is preparing the final plans and marketing approach together with the Valencian investment manager Net de Gerrers. The sales prices of the homes have not been set yet, but they are expected to be in line with the average for the market in Benidorm, which stands at around €2,500/m2.

The Company for the Management of Assets Proceeding from the Restructuring of the Banking System (Sareb) sold the debt associated with the In Tempo building to SVP Global last autumn for more than €60 million. The bad bank took over the loan amounting to €108 million corresponding to the tallest building in the Community of Valencia five years ago. The buyer, which is headquartered in the USA, was advised by Evercore, Gómez-Acebo & Pombo Abogados and Net de Gerrers.

Sources close to the operation indicated that the project was almost finished (93% execution rate) and pointed out that Net de Gerrers is acting as the manager of the investment fund SVP in the operation. The building is in a “perfect condition” despite the fact that four years have passed since the construction work was suspended. The owners have decided to introduce improvements to the original plans to make the homes more attractive.

The owners are going to market the property “using the building’s own brand. It is a common formula that is used for iconic buildings in New York”, said the same sources.

The In Tempo building project, which is the tallest residential property in Spain, was blocked when the Alicante-based property developer Olga Urbana filed for creditor bankruptcy. The suspension of payments left 137 creditors trapped and a bankruptcy liability amounting to €141 million.

Original story: Levante EMV (by R. Ferrando)

Translation: Carmel Drake

Blackstone Sells 19 Plots of Land in NW Madrid to Ibosa

12 March 2018 – El Confidencial

A large-scale operation has been closed in the real estate market in Madrid. Grupo Ibosa has purchased the largest batch of “finalist” land – also known as land that is ready to be built on – in the north of Madrid from the US fund Blackstone for €16 million. The plots are located in one of the areas with the highest purchasing power in the whole Spanish capital, next to La Zarzuela race track, in Valdemarín (Aravaca), where properties, the vast majority of which are family homes, cost upwards of €1 million.

According to various sources, the cooperative manager is working with Gran Roque Capital, the real estate management company owned by the Venezuelan businessman Miguel Ángel Capriles, and the fund Urbania Internacional, with whom it has constructed various projects in the area.

The acquired land is divided into 19 plots – with surface areas ranging between 500 m2 and 750 m2 each (…). They used to belong to Jardines del Hipódromo, a company owned by Inmobiliaria Monteverde, which filed for creditors’ bankruptcy at the end of 2011. At the end of 2016, Mercantile Court nº8 in Madrid convened the auction of the plots – the company’s only asset – which ended up in the hands of Blackstone, one of its creditors after it purchased the debt that the company had taken out with Banco Sabadell and La Caixa (…).

Grupo Ibosa has also purchased land in Aravaca from Blackstone, specifically, on Calle Diplomáticos, where it is going to build eight luxury family homes measuring 700 m2 on plots spanning 1,000 m2. And, it has an agreement with another owner for another plot in Valdemarín to build another dozen houses.

In total, three transactions – which amount to around 24,000 m2 in total – involving a very scarce asset in the capital, which has led to real competition between property developers and investment funds and an important upwards pressure in prices. In total, Grupo Ibosa is going to build almost 40 units from whose sale it expects to obtain revenues of more than €55 million. In all three cases, the developments will be carried out under the cooperative regime (…).

A sought-after neighbourhood

Valdemarín is one of the most sought-after neighbourhoods in Madrid for young directors and Spanish executives. A neighbourhood where homes cost upwards of €1 million and where plots of land – like in the neighbouring El Barrial – are really scarce. New build properties are also in short supply, which has led to significant price increases of 20% (10% per annum) in recent years. According to the sources consulted, everything that comes onto the market is sold very quickly.

“Within Aravaca, Valdemarín has become fashionable thanks to its good schools and access to Madrid,” say sources at Engel & Völkers, which places the maximum price that can be paid in the area at €6,300/m2 (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Vivenio Finalises Purchase of 5 Assets in Madrid for €130M

2 March 2018 – Eje Prime

Renta is pampering the Socimi that it owns jointly with APG. The Socimi Vivenio currently has committed investments worth €130 million in five residential assets in Madrid and is expecting to increase its investments to €250 million in the short term, according to explanations provided by sources at the company. Its objective for the next five years is to reach an investment volume of €1.5 billion.

Although, for the time being, the company does not want to disclose the specific location of its latest assets, they may be located on the outskirts of the Spanish capital, which is where all of the properties that Renta’s Socimi has purchased in recent months are situated.

Last week, Vivenio announced an investment of €13.5 million to purchase more than 100 residential homes in a development by the Suquía Group. The Catalan manager reached an agreement with the Guizpuzcoan property developer, which has been immersed in bankruptcy proceedings since 2015 (…).

Those purchases are in addition to the acquisition plan that Vivenio has underway. The Socimi plans to invest in assets worth €1.5 billion in Madrid and Barcelona, primarily, with a minimum investment ticket per operation of €10 million.

Originally known as Rembrandt, Vivenio has already invested almost €100 million in the purchase of 1,152 homes, exclusively in Madrid and the surrounding area. For the time being, the company, which also plans to undertake operations in Barcelona, has not entered the Catalan capital.

Before the end of 2017, Vivenio purchased three residential buildings in the Madrilenian towns of Alcorcón and Campo Real, comprising 166 apartments in total. The assets acquired are distributed across one building in Alcorcón, comprising 139 homes, and two others in Campo Real, with 27 homes, as well as 173 parking spaces and 141 storerooms.

In addition, Renta Corporación and APG are going to debut their Socimi on the stock market in 2019. The company has already made itself known in the real estate market by hiring Borja Lamana, formerly of Santander and Azora, who it appointed as the Head of Asset Management in January.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Renta Corporación Fattens Up its Socimi with Flats Acquired through Suquía’s Bankruptcy

24 February 2018 – Voz Pópuli

The Socimi Vivenio, created by Renta Corporación and the Dutch pension fund APG, has reached an agreement with the Suquía group to acquire homes in Vallecas (Madrid) for a price of more than €13 million.

The real estate company Suquía, which is headquartered in San Sebastián and which was declared bankrupt two years ago, has recently reached a payment agreement with its creditors, the majority of which are financial institutions, to avoid the bankruptcy situation in which it is immersed.

During the negotiations to reach the agreement with its creditors, the company has made several deals to sell assets, including one with the Socimi Vivenio, which has agreed to purchase more than 100 homes located in a building on Calle Arte Pop, in the Vallecas neighbourhood of Madrid, for €13.54 million.

The agreement between Renta Corporación’s Socimi and Suquía values most of the homes at a price of less than €200,000, with the exception of the penthouses, which are reportedly worth more than €300,000. The sale agreement is pending authorisation by the judge of Mercantile Court number 1 in San Sebastián, which is in charge of Suquía’s bankruptcy proceedings, after having already requested it during the insolvency administration.

The creditors of the real estate company include Sareb, which has agreed that its mortgages on the homes that Vivenio is going to purchase may be cancelled simultaneously, as part of the bankruptcy process

Promociones Suquía was constituted in 1986, with a registered office for corporate and tax purposes in San Sebastián. It was declared bankrupt in December 2015. In 2016, according to the accounts filed by the company with the Mercantile Registry, to which this newspaper has had access through Insight View, it recorded losses of €1.8 million. The company ended that year with non-current bank debt amounting to €39.2 million and current bank debt of €8 million. Sources close to the real estate company indicate that following this agreement and the authorisation from the court, the company will continue with its property development activity in Bilbao, San Sebastián, and Madrid.

Renta Corporación, which has joined forces with the Dutch fund APG, plans to debut Vivenio on the stock market next year. The Socimi has set itself the objective of acquiring assets worth €1.5 billion in total, primarily properties in Madrid and Barcelona, with a minimum investment of €10 million.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

JP Morgan Negotiates €2bn Loan with Owner of Santander’s HQ

22 February 2018 – Voz Pópuli

There’s a new player in the complicated game of chess involving the bankruptcy and liquidation of the owner of Banco Santander’s headquarters, the Ciudad Financiera, in Madrid. One of the largest investment banks in the world, JP Morgan, is negotiating a €2 billion loan to unblock the bankruptcy proceedings, according to financial sources consulted by Vozpópuli. JP Morgan declined to comment about the rumours in the market. Market sources indicate that the loan has not been granted yet.

In this way, the US entity would support one of the shareholders, the company Edgeworth Capital, owned by the Iranian businessman Robert Tchenguiz. That banker is trying to get Marme Inversiones 2007, the company that owns the office complex, to emerge from bankruptcy without having to file for liquidation. To this end, it has asked Mercantile Court number 9 in Madrid to give it the green light to negotiate an early termination for payments with the creditors.

That is where JPMorgan comes in. Tchenguiz has managed to convince the entity to consider financing almost €2 billion, which would have to be used to repay all of the creditors, including several banks such as CaixaBank, ING, RBS and Santander itself, as well as funds such as GSO (owned by Blackstone), Canyon, Burlington, Värde Partners, Centerbridge and Monarch.

Many of these creditors, above all the funds that purchased debt at a discount, agree with Tchenguiz. But not the other shareholder, the British magnate Glenn Maud, who is preparing to make a rival offer, or Santander, which is leaning towards the proposal put forward by the Arab fund AGC.

Status of proceedings

After years of bankruptcy and hundreds of resources, the situation is closer than ever to being unblocked. In fact, the court has already given the green light to the liquidation plan for Marme Inversiones 2007. The problem is that two other parent companies, Delma and Ramblas, are still immersed in bankruptcy proceedings. A resolution is expected before the summer.

Unless there is a new legal war, all indications are that the financial situation of the owner of the Ciudad Financiera will be resolved this year.

Along with the proposal from Tchenguiz, the fund AGC and the consortium Madison-Maud-GCA are studying putting between €2.7 billion and €2.8 billion on the table for Santander’s headquarters, within the liquidation process.

Together with JPMorgan, Goldman Sachs is also positioning itself in this operation. It has been advising Santander for months on the solution that may be found to resolve the situation of its headquarters.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

BBVA & Sabadell Hold Delicate Negotiations with the FGD to Sell Their Assets

5 February 2018 – Expansión

BBVA and Sabadell want to remove from their balance sheets the damaged real estate assets that they still own as a result of their acquisitions of Unnim and CAM, respectively. Those assets, which have a book value of around €16 billion in total, are temporarily protected by an Asset Protection Scheme (EPA), which, was granted at the time by the Deposit Guarantee Fund (FGD) so that the two banks would take on the business of the former savings banks, which had filed for bankruptcy. The negotiations that the two banks are now holding with the FGD share significant difficulties that cannot be solved easily, although they also have notable differences.

The European Central Bank has been putting pressure on the supervised entities to remove any damaged assets that they still own from their balance sheets, as soon as possible, because it understands that their maintenance reduces the banks’ ability to make profits and lets the doubts continue to hang over the real health of the entities. Now that the ECB considers that the worst of the crisis is over and that the banks are reasonably capitalised, it wants to clear up all the doubts. He has granted a period of five years for these problems to be resolved, although, in reality, it wants them to be sorted in a shorter timeframe: within three years.

When it acquired Popular, Santander launched a procedure to remove all of the real estate assets of its subsidiary from the balance sheet, by reaching an agreement with Blackstone to create a mixed company, in which the US fund holds the majority stake and where Santander has parked assets with a theoretical value of €30 billion. Liberbank has done the same, for a much small sum, retaining just 10% of the capital in its new company.

Meanwhile, BBVA has reached an agreement with Cerberus to transfer €13 billion to a company in which the bank will hold a 20% stake. Of those assets, a significant part, around €4 billion, correspond to assets proceeding from Unnim, which have a guarantee from the FGD for 80% of the losses that may be incurred at the time of their sale.

Meanwhile, Sabadell wants to divest assets worth €12 billion, which sit in a portfolio that is still subject to an EPA that will end in 2021, with the same guarantees as BBVA’s. The difference in the size of the two portfolios is clear.

That is where the problem arises. To close the operation, the FGD needs to accept that it will assume the losses incurred at the time of the sales. And even though its resources have been contributed exclusively by the financial institutions themselves, the public body does not have sufficient funds to assume those losses and whereby avoid grounds for dissolution.

Differences

In reality, the portfolio proceeding from Unnim does not cause excessive problems for several reasons. Firstly, it is smaller and, therefore, the loss to be assumed is considerably reduced. Moreover, according to sources in the know, the FGD has already recognised a coverage for those assets that is pretty close to the market value at which they could be sold (…).

The case of Sabadell, however, is different because the size of its protected portfolio is much larger. It started off at €22 billion and now amounts to just over half, around €12 billion. Sabadell considers that the real value of its assets is approximately half their theoretical value (…) but the FGD (…) maintains that the provisioning need is much lower, around 35% of the book value of those assets.

The difference in criteria between the two parties is important. In figures, it means that there is almost €1.8 billion that separates them and that, of that amount, if it is confirmed in the end, the FGD would have to assume almost €1.5 billion. That would be impossible in the current conditions, because it would mean that the body that guarantees the deposits of banking clients up to €100,000, would have to declare itself bankrupt or, as it has done on other occasions, impose an extraordinary surcharge on its shareholders, domestic entities, to balance its accounts and cover the hole (…).

A solution

But, on the other hand, the FGD is also interested in closing the chapter on asset protection schemes as soon as possible because, until that happens, it will be very difficult to progress with the construction of a European deposit guarantee fund, which is the third leg of the banking union. Indeed, it is not being built precisely because of reluctance being shown by the countries in the north to assume the problems of the past (…).

For this reason, sources close to the conversations confirm that they are now focusing on a possible solution that goes beyond the current moment. The FGD may be interested in reaching an agreement that would entail the possibility of accounting for the losses not in a single year, but rather over a longer period of time, possibly three years. The next few weeks are important because the authorities want to close the conversations before the end of the month.

Original story: Expansión (by Salvador Arancibia)

Translation: Carmel Drake

Bain Relaunches Habitat to Compete with the Large Real Estate Firms

30 January 2018 – Expansión

With 2.5 million m2 of land and the US investment fund Bain Capital Credit as its largest shareholder, the historical real estate company is working to regain its position as one of the largest property developers in the country.

Founded in 1953, the property developer Habitat is facing a new stage hand in hand with its new shareholder: the US investment firm Bain Capital Credit.

This firm – the subsidiary of a fund created in Boston by the former Republican White House candidate Mitt Romney amongst others – completed the purchase of Habitat on 22 December after fighting off competition from other investment firms such as Oaktree and Apollo.

The arrival of the new shareholder gave oxygen to one of the historical real estate companies in the sector. Created by the Catalan businessman Josep Maria Figueras and Josep Ildefons, the company purchased the real estate arm of Ferrovial in 2006 for €2 billion. Two years later, it filed for creditor bankruptcy with a debt amounting to more than €2.8 billion.

With a proposal to pay up to 80% of the amount owed, the property developer emerged from insolvency in April 2010. Nevertheless, the economic crisis was still raging in Spain, and that caused the Figueras family, led by the son of the founder, Bruno, to lose control of Habitat to funds such as Goldman Sachs, Bank of America Merrill Lynch and Capstone, amongst others. And it was they who hung the ‘for sale’ sign up over the company last summer (…).

Habitat owns a land portfolio spanning 2.5 million m2, which makes it the second largest owner of this precious asset in the country, behind only Metrovacesa (which owns 6 million m2) and ahead of companies such as Neinor, Aedas and Vía Célere. Its portfolio is split almost equally between developable land and plots that require management, say sources at the company.

To this portfolio, new acquisitions that Habitat is currently evaluating will soon be added, either through purchases from third parties or incorporations of foreclosed assets and loans from Bain’s portfolio. Habitat’s objective is to look for opportunities in the major markets where it is already present, namely: Madrid, Barcelona and Sevilla.

Managing the land portfolio is not the firm’s only task for 2018. This year, the company also plans to deliver the first of more than 1,000 homes that it currently has up for sale. Of those 1,000 homes, more than 700 are currently under construction and of those, more than 80% have already been sold.

Deliveries

Thanks to these deliveries – the first 60 units in Alcobendas (Madrid) will be handed over during the first quarter of the year – the company expects to increase its revenue so that the figure for 2017 will be similar to that recorded in 2016 (€44.5 million).

For this new period, Bain Capital will keep in place the management team that joined the company last year. In this way, the most senior executive will be Eduardo Carreño, the Director General of Habitat, who has been managing the executive functions of the real estate company since the departure of Bruno Figueras in June 2016.

In January, the company moved its headquarters to Madrid, although it will continue to hold onto its offices in Barcelona as a regional delegation.

Amongst the alternatives that Bain is considering for its future divestment of Habitat include its placement on the stock market, as Lone Star did with Neinor Homes, or a merger with another group.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

The Owner of Santander’s HQ is Set to Emerge from Bankruptcy

26 January 2018 – Voz Pópuli

There is light at the end of the tunnel in the creditor bankruptcy of Marme Inversiones 2007, the company that owns Banco Santander’s Ciudad Financiera (in Madrid). This week, a key meeting was held to unblock the bankruptcy proceedings, with deliberation over several appeals, something that the courts will come to a decision about over the coming weeks.

The parties potentially interested in this process have started to take positions regarding the possible sale of the Ciudad Financiera, which could happen in the middle of this year. The best-positioned player is the fund AGC Equity Partners, with a proposal that values that bank’s headquarters at between €2.7 billion and €2.8 billion, as this newspaper revealed.

But two competitors have emerged: a consortium formed by Madison Capital, Glenn Maud and GCA; and a proposal from the Iranian-born financier, Robert Tchenguiz, according to financial sources consulted by Vozpópuli.

The offer that most concerns AGC is the one presented by the US funds (Madison and GCA) and the British property magnate Glenn Maud, who was one of the original buyers in 2008. The price that they may put on the table is close to the figure being offered by the Arab fund, around €2.7 billion.

Months of advantage

Nevertheless, AGC is the favourite in the race because it has been negotiating the operation with Santander for several months. Santander is not only the tenant in this case, it also holds a small part of the debt and a right of first refusal. Having said that, the Commercial Court number 9 of Madrid has denied that preferential right until now. Be that as it may, an agreement with Santander would facilitate everything.

Meanwhile, in addition to these two offers, further competition has emerged in the form of Tchenguiz, owner of the company Edgeworth Capital. The Iranian national has been trying to harness his investment in subordinated debt for years. By holding one of the riskiest tranches, he has to make sure that the liquidation plan protects him, otherwise, he will be exposed to discounts. That negative scenario would become a reality with AGC’s liquidation plan.

For this reason, Tchenguiz is offering an insolvency exit plan in which he would become the owner of the Ciudad Financiera by purchasing the stake owned by Glenn Maud.

To complete the picture, we should take into account that beyond the bankruptcy of Marme Inversiones, two other companies in Spain are involved in this insolvency: its two parent companies, Delma and Ramblas. And that those creditors and investors are awaiting trials in the UK and The Netherlands. This complex legal battle is starting to see the light at the end of the tunnel.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Argia’s Bankruptcy Leads to Oviedo’s Largest Ever Land Auction

10 December 2017 – El Comercio

The bankruptcy of the property developer owned by the businessman Blas Herrero, Argia Inversiones Inmobiliarias, and the lack of interest in most of its assets from its banker, Liberbank, have made way for the city’s largest-ever auction of private land. In total, 159 lots worth more than €30 million will go under the hammer, ranging from buildable estates in Cerdeño, to buildable land in Prados de la Fuente, to around fifty finished homes also in Prados de la Fuente.

In reality, the investments are very recent. Herrero did not seek to obtain any returns from the land and housing sectors in Spain until 2005 when he took control of Inverural Capital and turned it into Argia Inversiones Inmobiliarias. After a few years of activity, the company stopped filing its annual accounts – in 2009 – and went off the radar.

In Oviedo, the firm had promoted one of the largest plots of land in Prados de la Fuente, under the commercial name Galana Residencial. The work on that group of buildings…did not go well…The first buyers reported problems with the finishes, as well as humidity in the garages and the poor quality of the padel court.

Eight years after the homes were handed over, 51 apartments in different parts of the development are now going on the market, with appraisal values ranging from €155,484 for a first floor 3-bedroom property to €250,000 for homes that are bigger and higher up (…).

House prices in the city of Oviedo in Q3 2017 amounted to €1,264/m2, according to the appraisal company Tinsa. In YoY terms, they rose by 1.5%, but the number of transactions was still very low and, in 2016, prices fell by 0.8% in YoY terms. Since the middle of 2008, each homeowner in Oviedo has lost 37% of his/her property value, on average (…).

Volatility and low returns are two of the factors that have ended up causing the Asturian businessman Blas Herrero to surrender his real estate ambitions just ten years after launching them and after more than five years of unremarkable activity. In 2015, Argia Inversiones Inmobiliarias filed for voluntary creditors’ bankruptcy. The liquidation plan…was approved in January.

A peaceful end is anticipated with the voluntary auction that is due to be held on 20 December. The 159 lots, which will be bid for independently, include some mortgage charges in favour of Liberbank, who has most at stake in terms of the success of these disposals (…).

Prices and lots

The data is not encouraging. In the last year – between July 2016 and June this year – 633 homes were sold across the whole of Asturias (…). The figures indicate that the crisis is still on-going. A decade ago, the General Council of Notaries recorded three times as many real estate transactions per year. Moreover, some of the lots are far from the reach of most (…). Specifically, three plots from the special plan are together worth €10.5 million (…).

Original story: El Comercio (by Gonzalo Díaz-Rubín)

Translation: Carmel Drake