Saba Delays AGM by 1 Month to Finalise New Ownership Structure

3 May 2018 – Expansión

Never before has an ordinary general meeting of Saba’s shareholders raised so much expectation. The parking lot company, in which Criteria Caixa holds a 50.1% stake, has delayed the shareholders’ meeting that it had planned to hold in Barcelona on 9 May, postponing it until 12 June. The reason is that the shareholders still need to agree on the changes in their stakes in the parking lot company.

Its been a while since Torreal, which owns 20% of Saba; KKR, which holds 18.5%; and ProA, which owns 10.5%, expressed their intention of divesting their stakes in the company, a move that is logical for funds, which typically rotate their portfolios every few years.

But Criteria Caixa, which is in a position to buy, in light of the proceeds amounting to €3 billion that it is going to receive over the next few months when it sells its stake in Abertis, has initiated conversations with the other three major shareholders to take control of the company. The remaining 1.2% of the shares, which are owned by small investors, proceed from the time when Saba belonged to Abertis.

In parallel, Criteria is also planning to hold a Board Meeting at the end of this month to define the final position of its investment portfolio. Sources consulted assure that a decision will be taken at that meeting as to whether to take over complete control of the company led by Josep Martínez Vila or to sell its stake. In theory, all indicators are that Criteria Caixa will become Saba’s sole shareholder.

Finishing touches

During the extra month that they will now have, the shareholders are going to close all of the details to approve the changes in their shareholding. Meanwhile, Saba has justified the change of date in “the greater social interest and for reasons beyond its control”. Nevertheless, some parties were in favour of holding the meeting and organising another extraordinary meeting later on, once the shareholder restructuring has been agreed.

The aspects to be discussed include the distribution of a dividend amounting to €19.95 million, charged against the issue premium; the approval of the results; and, as the fifth item on the agenda, the re-election and appointment of the directors.

Criteria is going through a time of enormous liquidity due to the funds that it is going to receive when it sells the 18% stake that it holds in Abertis and because it has not participated in any large operations since it divested its 10% stake in Gas Natural Fenosa, for which it obtained €1.8 billion.

Saba, chaired by Salvador Alemany, is worth around €1.4 billion, on the basis of a multiple of between 12 and 14 times its EBITDA, which amounts to around €100 million. The company manages 195,000 parking spaces and, in 2016 – the most recent year for which data is available – it recorded revenues of €205 million (+17%) and obtained EBITDA of €94 million (+10%) (…).

Original story: Expansión (by Artur Zanón)

Translation: Carmel Drake

Martinsa’s Board Approves The Liquidation Of The RE Company

3 March 2015 – Cinco Días

The largest ever property and land sale in Spain’s history begins

Yesterday (Monday), Martinsa Fadesa held what will possibly be its last ever Board meeting. During the meeting, it was agreed that the company would begin liquidation proceedings and that today (Tuesday), it would file a petition to the Commercial Court in La Coruña, for the liquidation of the group, after its main creditors failed last week to approve the proposed agreement presented by the company.

Last week the deadline ended for Martinsa Fadesa’s creditors to sign up to (or reject) the proposed agreement presented by the company on 30 December 2014. According to financial sources, the main creditors, including Sareb, CaixaBank and Popular (which held €1,457.8 million, €907.9 million and €574.2 million of the company’s debt as at 30 June 2014, according to those sources) all opposed the agreement.

“Martinsa’s proposed agreement is not feasible, the business plan that has been presented is not credible”, said the financial sources. “As a result of the liquidation, the creditors will have access to €980 million in terms of asset value”, they maintain, “and the creditors will have access to more transparent information during the liquidation process”.

Martinsa Fadesa recorded a net negative equity position of €4,603.4 million at the end of 2014 (€4,288.6 million in 2011), according to the annual results presented by the real estate company to the CNMV. The company closed last year with assets worth €2,392 million and liabilities amounting to €6,995 million; it recorded losses of €313.6 million in 2014 (51.9% lower than in 2013) and increased its turnover by 18.3% to €130 million.

Between 2006 and 2007, Fernando Martín, the Chairman of Martinsa Fadesa, agreed to purchase Fadesa from Manuel Jove, in a transaction worth €4,045 million. In 2008, Martinsa Fadesa filed for bankruptcy and in 2011, it agreed a payment schedule to allow it to emerge from the bankruptcy situation. That same year, the company decided, in a shareholders’ meeting, to file a social responsibility claim against Jove and Fadesa’s former CEO, Antonio De la Morena for €1,576 million. Commercial Court number 1 in La Coruña and the Provincial Court of La Coruña both rejected the claim filed by Martinsa Fadesa and so the company appealed to the Supreme Court. Last month, the Supreme Court also rejected Fernando Martín’s claim.

For the last two years, Martinsa has failed to meet the payment commitments established in the agreement that allowed the company to emerge from its bankruptcy proceedings (these amounted to €451 million in 2014). The Supreme Court’s rejection of the company’s claim was the last straw for the real estate company. The group had assured its creditors that it would use the money to pay them if it won its appeal at the Supreme Court; however, having now lost its claim, the company will have to also pay the legal costs associated with the process, which legal sources estimate could amount to €60 million.

Experts in bankruptcy matters consider that Martinsa Fadesa’s liquidation process will be the largest to ever to take place in Spain.

The same experts explained that the bankruptcy judge may reinstate one, two or three members of the previous bankruptcy administration team, however given the size of the liquidation process that is now beginning, it would be usual for Ángel Martín Torres (KPMG), Antonio Moreno Rodríguez (Bankinter) and the lawyer Antonia Magdaleno to jointly take charge of the liquidation.

Claims of €34 million for construction defects

Martinsa Fadesa is facing 32 civil lawsuits of more than €50,000 (each) brought by groups of owners and individual owners for construction defects. At the presentation of its latest results, the company explained that the total amount claimed in these cases amounts to €34 million. In addition, the group is also facing other kinds of legal processes. One item that stands out is the €19.4 million provision that Martinsa has made in relation to the group’s development in Miño, La Coruña. “Claims have been filed with both the Commercial Registry and the Civil Registry by house buyers in this area, with the result that some of these cases have been declared resolved in the contracts, which means that the company will have to return the amounts received on account from these clients”, explained Martinsa Fadesa.

In its 2014 accounts, the company states that it has a deferred payment agreement with the Tax Authorities for the amount of its privileged bankruptcy debt, i.e. €47.68 million. That debt fell/falls due on 20 December 2014 (€9.6 million) and 20 December 2015 (€38 million), respectively. Martinsa requested and obtained “reconsideration of the due date of the instalment relating to 2014” from the Tax Authorities. The new payment date has been set for 20 May.

In 2014, Martinsa Fadesa employed 150 people (161 people in 2013). Last year, the group incurred staff costs amounting to €14.3 million (€12.9 million in 2013).

Original story: Cinco Días (by Alberto Ortín)

Translation: Carmel Drake

Sareb Holds Board Meeting As Martinsa’s Deadline Looms

26 February 2015 – Cinco Días

Sareb held an ordinary Board meeting yesterday (as it does once a month) with the case of Martinsa Fadesa on the table. The creditor banks of the real estate company have until today, Thursday, to decide whether or not to approve the new proposed agreement presented by the company to avoid its liquidation. According to financial sources, the debt obligations that Sareb holds in Martinsa Fadesa amounted to €1,457.8 million as at June 2014. The (real estate company’s) second largest creditor is Caixabank with €907.9 million.

Martinsa Fadesa submitted a new proposed agreement to avoid its liquidation to its creditors on 30 December, since it is unable to make some of the payments stipulated in the previous agreement. Under the new proposal, the company highlighted that if it won its claim in the Supreme Court against Manuel Jove, the former chairman of Fadesa, against whom it had filed a multi-million euro lawsuit, then it would allocate the resources to pay its creditors.

Fernando Martín (pictured above) agreed the purchase of Fadesa from Manuel Jose between 2006 and 2007, in a transaction valued at €4,045 million. In 2008, Martinsa Fadesa filed for bankruptcy, the largest ever case in Spain, with debts of approximately €7,000 million. In 2011, the company reached a payment agreement with its creditors and so emerged from bankruptcy. That same year, the company decided, in its shareholders’ meeting, to file a social responsibility claim against Jove and the former CEO of the company, Antonio De la Morena, for €1,576 million. The former Chairman of Fadesa, who is now the Chairman of the Inveravante group, said then that the measure was “absolute nonsense”. The Commercial Court number 1 in La Coruña and the Provincial Court of La Coruña rejected the claim filed by Martinsa Fadesa, and so the company appealed to the Supreme Court. This month, the Supreme Court also rejected Fernando Martín’s claim.

The blow dealt by the Supreme Court to Martinsa Fadesa damages the real estate company’s prospects of avoiding liquidation even further. In addition, the Supreme Court ordered the company to pay all of the legal costs, which will require the immediate disbursement of several million euros (up to €60 million, according to legal sources).

Between January and September 2014, Martinsa generated turnover of €95.2 million, an increase of €24.5 million on the same period in the previous year, and it recorded losses of €201.6 million (vs. losses of €322.9 million during the first three quarters of 2012). In 2013, the group lost €652 million, and recorded negative equity of €4,288 million.

Like many other real estate companies, despite having a negative net equity balance, Martinsa avoided the requirement for dissolution under the Companies’ Act, thanks to Royal Decree Law 10/2008, which removes the requirement to account for impairments relating to real estate investments. Martinsa’s financial position is clearly very delicate and may be further compounded by the fact that the Government may decide not to renew the relevant regulation this year.

Representatives of the creditors met with the company last week and called for the departure of Fernando Martín as owner and shareholder, according to sources. Although liquidation may seem like the most logical course of action for the company, the same sources do not rule out the possibility of a last minute agreement being reached to avoid that measure.

Original story: Cinco Días (by Alberto Ortín Ramón)

Translation: Carmel Drake