VBare Launches a €30M Capital Increase

19 May 2019 – Eje Prime

VBare Iberian Properties has launched a capital increase to grow its portfolio and make the leap to the main stock market before 31 March 2020. The company has just approved a capital increase amounting to €30 million, which will be executed through the issue and launch into circulation of up to 2,238,339 ordinary shares.

At the same time, the company’s Board of Directors has committed to making “every effort” to list VBare on the main stock market before the end of the first quarter of 2020. The Socimi recorded profits of €1.1 million during Q1 2019 and of €4.8 million in 2018.

Original story: Eje Prime

Translation/Summary: Carmel Drake

Sareb’s Board Suspends the Sale of its Socimi Témpore to Launch a ‘Transparent Process’

19 December 2018 – El Independiente

The sale of Tempore Properties, the Socimi owned by the Company for the Management of Assets proceeding from the Restructuring of the Banking System (Sareb), was almost a done deal, but the plug has been pulled at the final hurdle. Sareb and the investment fund TPG were in the midst of closing the final details of the operation when the Board of the so-called “bad bank” decided to reject the offer. To the bewilderment of the US group, the directors of Sareb have demanded the launch of an ordered and transparent sale process, according to sources familiar with the events speaking to El Independiente.

Tempore, which has just carried out a non-monetary capital increase for €150 million and which will soon manage 3,300 real estate assets worth €325 million, received several offers at the end of November. The bid from TPG was successful over the others, but the process did not have all of the guarantees, and so the members of Sareb’s Board of Directors took the decision to block the transaction.

“It makes sense, especially taking into account the legal problems that could be generated if a government agency participates in exclusive processes”, indicated sources in the sector. “The directors have to be increasingly careful with the operations that they approve or they may incur serious faults”, added another.

In this way, the entity that it seemed was going to become the new owner of the Socimi, TPG, is the shareholder of companies such as Spotify, Airbnb, Burger King, Lenovo, Ducati and Grohe, amongst others.

Sareb, in which the State owns a 45% stake, wanted to close the operation before the end of the year and improve the appearance of its accounts, which are set to report losses, for another year. Now, however, that operation will have to wait until 2019.

The Tempore portfolio being sold by Sareb is concentrated (80%) in the metropolitan areas of Spain’s major capitals, with the remaining assets located in geographical areas with significant demand in the rental market, such as Valencia, Sevilla, Zaragoza, Málaga and Almería.

Azora is responsible for the management of the portfolio, specifically for the administration and sale of the assets. The Socimi is led by the Director of Rentals at Sareb, Nicolás Díaz Saldaña. Before joining the bad bank, Saldaña led the international team at Metrovacesa during the toughest period of the real estate crisis (…).

Several sources in the financial sector have indicated that Sareb must maximise the cleanliness of the operations that it participates in, especially after some institutions have been called out for irregular sales.

The Bank of Spain took Sareb to task over some suspicious activity following an inspection, according to a report to which El Independiente has had access.

Original story: El Independiente (by Ana Antón)

Translation: Carmel Drake

Blackstone Obtains a c. €2bn Mega-Loan for Testa

19 December 2018 – Expansión

The Socimi Testa held an extraordinary General Shareholders’ Meeting on Tuesday, where it reduced the number of members of its Board of Directors from 11 to 5. The new governing body includes three people proceeding from the new majority shareholder, the investor group Blackstone.

Testa Residencial is going to sign a mega-loan amounting to €1.943 billion, which it had already agreed in principle after the US fund Blackstone takes control of the rental home Socimi with the purchase of 80.6% of its share capital within the next few days.

The loan, equivalent to the amount that the purchase of the firm has cost the fund (around €1.52 billion) along with the debt held by the Socimi, has been agreed with Bank of America Merrill Lynch, Société Générale and Santander itself, Blackstone’s partner in Testa with 18% of its share capital.

This bank financing was agreed during the first meeting of Testa’s new Board of Directors following the restructuring of the management body conducted hours before, at the General Shareholders’ Meeting, when entry was granted to Blackstone.

By virtue of this restructuring, Testa’s Board has been reduced to five members, from the previous number of eleven. The fund has appointed three representatives to the Board, one of which, Diego San José, will also be the President of the Socimi, a role held until now by Ignacio Moreno.

The other two chairs at the table will continue to be occupied by the current CEO, Wolfgang Beck, and the director Miguel Oñate. In this way, the Board seeks to ensure continuity in the management of the real estate firm and to continue benefitting from Oñate’s experience and knowledge.

New strategy

Despite this continuity in management, at the first meeting of Testa’s Board, with Blackstone in the driving seat, a resolution was taken to approve a new strategy for the company, which had been planning to invest €550 million in the purchase of new rental homes to add to its existing portfolio of 10,700 flats.

The new strategy involves “analysing the eventual purchase of new homes depending on the circumstances at play in each case”. Moreover, Blackstone has raised Testa’s current leverage limit, situated at 35% of its asset value, and has reduced the dividend payment to the “legal minimum”.

In terms of the super-loan, it is being guaranteed by the assets of the Socimi itself, worth €2.3 billion in May when it was considering making its debut on the main stock market, and which will be signed with a two-year term, with the possibility of three annual extensions.

Dividend

Before changing the dividend policy, the Board also agreed to distribute a payment to the shareholders leaving the Socimi as well as to the new shareholders.

Specifically, it is going to pay €7.612 per share to the shareholders that leave the company after selling their stakes to Blackstone, in other words, to BBVA, Acciona and Merlin and to Santander for the proportion of shares that it has also sold.

Moreover, Testa will pay €0.035 per share to those players that will be its shareholders once the sale and purchase agreement has been signed within the next few days, in other words, to Blackstone and Santander, as well as to a group of minority shareholders who own 0.5%.

With the acquisition of this Socimi, Blackstone is strengthening its position as the largest owner of rental homes in Spain, with around 24,000 homes through its various firms and Socimis. Moreover, it is consolidating its position as one of the largest real estate owners in the country, with an asset portfolio worth more than €20 billion.

Original story: Expansión

Translation: Carmel Drake

Santander Sells Another 10.6% of Testa to Blackstone for €201M

21 November 2018 – Expansión

Santander has sold another 10.62% of the share capital in the Socimi Testa Residencial to Blackstone for €201 million, whereby reducing its stake in the rental home Socimi to 18%. Meanwhile, the US fund now controls 80.63% of the entity’s shares.

The bank chaired by Ana Botín has added this sale to another one involving 7.76% of share capital that it already agreed with the US fund. The new sale from Santander came about after Blackstone launched an offer to purchase any Testa shares owned by minority shareholders, a total of 702,508 shares, representing 0.53% of its share capital, according to reports filed by the fund with the Alternative Investment Market (MAB).

Blackstone offered the owners of those shares €14.32 per share, the same price it paid Santander, BBVA, Merlin and Acciona for the stakes that those companies and banks sold it, which together amount to the aforementioned 80.63% stake. The offer price is 3% higher than the listing price (€13.90) at which Testa debuted on the MAB at the end of July and represents a market valuation for the company of €1.895 billion.

The amount is also higher than the €14.10 price at which the firm was trading when Blackstone launched its offer in the middle of last month, but below the price at which the Socimi’s shares are currently trading. The offer by the fund to Testa’s minority shareholders, estimated to amount to €10.06 million in total, began yesterday and will last for a month until 20 December.

Blackstone has convened two consecutive extraordinary shareholders meetings for Testa to be held on 18 and 21 December with the aim of closing the operation to purchase this Socimi and restructure its Board of Directors.

With this operation, the fund from the USA is strengthening its position as the largest owner of rental homes in Spain, with a portfolio of around 24,000 properties, and is ratifying its position as one of the largest owners of all types of real estate assets, given that it now holds assets worth more than €20 billion in its portfolio.

Original story: Expansión

Translation: Carmel Drake

Qatari Sovereign Fund Becomes Colonial’s Largest Shareholder

8 November 2018 – Europa Press

Colonial has approved a capital increase at an extraordinary shareholders’ meeting, whereby enabling the Qatari Sovereign Fund to become the Socimi’s largest shareholder since it will see its stake in the company double to 20%.

Qatar is becoming the largest shareholder of the second largest Socimi in Spain, a firm that owns office buildings in Madrid, Barcelona and Paris worth €11 billion, through an agreement reached with Colonial to exchange the shares of its French subsidiary Société Foncière Lyonnaise (SFL).

Specifically, Colonial is going to give Qatar the own shares that it issues during the capital increase and, in exchange, the fund is going to hand over the 22% stake that it holds in SFL.

In this way, Qatar will double its presence in Colonial from its current position of 10% to the aforementioned figure of 20% and will become its largest shareholder. Meanwhile, the real estate firm will increase the controlling stake that it holds in SFL from 59% to 80.74%.

It is an operation worth €718 million, which Colonial is framing in the context of simplifying the group’s shareholder structure and of strengthening its position in SFL and in France, a company and market that it considers to be “strategic”.

The real estate company is tackling this transaction after completing the merger of the Socimi Axiare and at a time when it is immersed in a full growth strategy through investments in purchases and the new build developments.

In the case of Qatar, it is strengthening its position as the largest shareholder of the second largest listed real estate firm in the country, in line with the commitment that many large international funds are making to the Spanish real estate sector. Moreover, it will retain an indirect stake in SFL.

No changes on the board

These shareholder exchanges will not have any impact on the Board of Directors of Colonial, given that the Qatari fund will retain the two seats that it has had on the management board for a while, when it had a larger stake, according to a statement made by the President of the Socimi, Juan José Brugera, after the meeting.

Brugera said that the operation was approved unanimously by all of the shareholders, whereby ruling out any bad feeling on the part of Colonial’s largest shareholder until now, the Mexican group Finaccess, not only for losing its status (as the largest shareholder), but also for seeing its stake diluted from 18% to 16% as a result of the capital increase.

Original story: Europa Press

Translation: Carmel Drake

Hispania Signs €340M Financing Agreement with BNP Paribas

26 September 2018 – Hosteltur

Hispania Activos Inmobiliarios has signed an agreement with BNP Paribas to open a financing line amounting to €340 million to finance and/or refinance its debt, according to a statement filed by the Socimi today with Spain’s National Securities and Markets Commission (CNMV).

In the relevant fact, the company reports that on 25 September 2018, it signed the aforementioned agreement with the entity “under market terms, amounting to €340,000,000, to finance and/or refinance debt held by the group’s entities upon their maturity, plus commissions, costs and expenses”.

This new financing arrangement will expire on 16 February 2020, although it may be extended twice by the company for one year each time.

Hispania recorded a net profit of €71.9 million during the first half of this year, 55% less than during the same period in 2017 when it earned €161.4 million. That decrease was basically due to the recognition of a provision for the fees to be paid to Azora, the former manager of the group. As Hosteltur reported, the relationship between the two entities was terminated on Monday, with Concha Osácar and Fernando Gumuzio, the owners of Azora, leaving the Board of Directors of the Socimi.

Blackstone, the new owner of Hispania, has paid €224 million to the manager by way of compensation for the early termination of Hispania’s asset management contract, which covered its hotels, offices and residential buildings. The indemnity amount was calculated on the basis of the manager’s base fees (€33.6 million) and success fees (€190.8 million), according to the terms specified in the “Termination Letter”, following the success of the takeover bid launched by the US fund for 100% of the Socimi.

Nevertheless, in terms of the results during the first half of the year, Hispania’s operating profit grew by almost 16%, to €57.1 million, whilst its revenues amounted to €85.3 million, which represents an increase of 9.8%.

Revenues from rental income amounted to €80.9 million, up by 14%. Of that amount, €67.9 million corresponded to hotels, €11.3 million to office buildings and €1.7 million to homes.

At the end of the first half of the year, the gross value of Hispania’s assets amounted to €2.818 billion, which represents an increase of 60.8% with respect to their acquisition price and of 43.3% compared to the total investment.

Original story: Hosteltur

Translation: Carmel Drake

Spain’s Competition Authority Approves Minor’s Takeover of NH

21 July 2018 – Expansión

Minor’s takeover of the NH Hotel Group is moving forward. The Spanish National Securities and Markets Commission (CNMV) admitted the offer from the Thai company Minor on Thursday and then, yesterday (Friday), Minor obtained approval from the Spanish and Portuguese competition authorities (CNMC). In this way, the offer is conditioned “exclusively” on its approval by Minor’s General Shareholders Meeting, which has been convened for 9 August. The Thai company currently controls 29.8% of NH’s share capital and, in September, plans to complete the purchase of an additional 8.4% stake from the Chinese firm HNA, which will increase its percentage stake to more than 38%.

The company, which is offering to pay €6.40 per share (€6.30 following the payment of the dividend approved by the General Shareholders’ Meeting) has indicated that its objective involves controlling between 51% and 55% of the Spanish group and for the remaining shares to continue to be listed. If that limit is exceeded, the company will consider making way for the entry of a financial partner in the share capital. Minor has also said that its objective involves increasing NH’s dividend by 50% next year to €0.15 per share.

The Thai group recorded revenues of €1.4 billion in 2017, has a market capitalisation of €3.9 billion and employs 66,000 people. With this operation, Minor will strengthen its hotel presence in America and Europe. Minor has 161 hotels and 20,384 rooms, primarily in Asia and Africa, whilst NH has 382 establishments and 59,350 rooms. Currently, the only markets in which the two chains have a presence are Brazil, Portugal and the United Kingdom.

At the General Shareholders’ Meeting held in June, the Chairman of NH’s Board, Alfredo Fernández Agras, described the offer as insufficient. Moreover, the President of Hesperia and CEO of NH, José Antonio Castro, expressed his criticism of the operation and his dissatisfaction with the Thai group’s entry onto the Board of Directors, where it now has three representatives.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Sareb Analyses Goldman’s Report on the Sale of €20Bn of its Property

6 July 2018 – Voz Pópuli

One of the discussion points at the most recent meeting of Sareb’s Board of Directors, which took place this week, was Operation Alpha. The deal involves the sale of assets – non-performing loans, to be specific – with a gross value of around €20 billion (initially they were valued at €30 billion). This is the largest operation to be considered by the semi-public body since its creation, in 2012, and for this end, it has engaged Goldman Sachs.

The large international investment funds, such as Cerberus and Blackstone, are waiting for Sareb to decide whether to divest the portfolio before they put offers amounting to several billions of euros on the table. But the company in which the Frob holds stake, with almost 46% of its share capital, is taking its time.

According to sources close to the company chaired by Jaime Echegoyen, at that most recent meeting of Sareb’s board, Goldman Sachs reported on the progress of the report that it is preparing about Operation Alpha, which the Spanish entity will analyse when it comes to deciding whether to go ahead with the sale or not. When the US investment bank has finalised its report, Sareb’s Board of Directors will take a decision in this regard. “Goldman Sachs is still working on the report (…)”, they say.

“For Sareb”, explain the sources consulted, “the operation will generate losses regardless; the assets are over-valued, overpaid, and will definitely have to be sold at a discount”. Sareb is very aware that the moment “is ripe for a sale of this kind, given the appetite shown by the large investment funds”, but Operation Alpha may mean that the semi-public company will have to recognise such large losses that its own viability could be jeopardised.

For these reasons, Goldman Sachs is likely to suggest alternatives to carrying out the sale. One possibility, amongst others, is that Sareb could continue as a shareholder of the sold portfolio and that the fund that acquires the portfolio also takes responsibility for formalising the platform through which the assets will be sold or managed, in other words, the servicer. The sources consulted cite the sale of Popular’s real estate assets to Santander and Blackstone by way of example.

The assets in Operation Alpha basically correspond to the portfolio of non-performing loans whose management was granted by Sareb to Haya Real Estate, owned by the fund Cerberus, in 2014. That management contract is due to terminate in December 2019, and Sareb may organise a new tender or choose to renew it.

For Cerberus, it is key that Haya Real Estate renews its position as the manager of these assets ahead of the platform’s stock market debut, which the fund has delayed until the end of this year or the beginning of 2019; moreover, Cerberus may grow the portfolio managed by Haya if it manages to acquire Operation Alpha, and whereby debut a larger company on the stock market.

Sources close to the investment funds and Spanish banks consider that Sareb has suspended all of its major sales operations, including Alpha, due to the recent change of Government. “Operation Alpha may or may not go ahead, but the decision in that regard will be taken on the basis of the conclusions drawn by the Goldman Sachs report and upon the votes taken by the Board of Directors”, say sources close to Sareb.

Audit and public property

Although from the outside, Sareb is trying to remain completely calm in the face of the change in Government, sources close to the body, as well as others linked to the banks and investment funds, agree that, right now, there is concern about the possibility that a hasty political decision would complicate the work performed to date (…).

The party led by Pedro Sánchez has proposed carrying out an audit of Sareb. According to the sources consulted, that doesn’t make much sense when all of the focus possible has already been placed on the entity. The special shareholder composition of Sareb and the public interest associated with its activity mean that it is subject to supervision and analysis by the Bank of Spain, the Spanish National Securities and Market Commission and the European Central Bank, amongst others (…).

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Blackstone Formalises Revised Takeover Bid for Hispania

27 June 2018 – Eje Prime

The deal involving Blackstone’s purchase of Hispania has entered the home stretch. This lunchtime, the US fund has asked Spain’s National Securities and Exchange Commission (CNMV) to authorise a modification to the offer presented in its takeover bid for the Socimi, to €18.25 per share, a figure that both parties agreed to last week, according to a statement issued by the stock market regulator in a relevant fact.

The increase in the bid by Blackstone came hand in hand with a commitment from Hispania to accept the new offer, which values the Socimi at more than €1.992 billion. In April, the fund made its first offer of €17.45 per share, following its purchase of 16.5% of the company.

The initial bid fell below the expectations of the real estate company, which specialises in the hotel sector, but it now recommends the acceptance of the operation’s new conditions, which it describes as “attractive”.

All of the directors of the Socimi have reached an agreement to accept this new offer for 100% of its shares, equivalent to 48,108 shares, which account for 0.044% of Hispania’s share capital.

Azora (with 1.1 million shares and 1.070% of the capital) has “irrevocably” committed to accepting the new offer from Blackstone, as has Canepa (as the management company of Row Fund, which controls Tarmelane) on behalf of Tarmelane.

Original story: Eje Prime

Translation: Carmel Drake

Bain Appoints Juan María Nin as New President of Habitat

26 June 2018 – Eje Prime

Habitat is continuing to compose its governing body. The real estate company, which has been owned by Bain Capital since last year, has hired Juan María Nin (pictured below) as the new President of the company. The director is already a member of the Boards of Directors of Azora, Société Générale and Azvi.

Nin is joining the Catalan property developer at a time when the management team is being rebuilt by the US fund, which recently hired José Carlos Saz, formerly of Neinor Homes, as its new CEO.

The executive, who holds a degree in Law and Economics from the University of Deusto and a Masters in Law and Political Science from the London School of Economics, has enjoyed an outstanding career in the Spanish business world. Nin has held positions of responsibility at several banks including Santander, Sabadell and CaixaBank (…).

Habitat, which was acquired by Bain in December last year for €220 million, currently has a portfolio of projects underway in Spain, with more than 1,000 new homes being marketed in Madrid, Barcelona, Málaga, Sevilla, Córdoba, Valencia and Las Palmas de Gran Canarias. Of those, the real estate company has 700 homes under construction and expects to hand over more than 550 homes in the next twelve months.

Original story: Eje Prime

Translation: Carmel Drake