Barcino Increases its Share Capital by €10M

25 June 2018 – Eje Prime

Barcino is injecting cash into its Socimi to continue its progress in the Spanish real estate sector. The manager has increased the entity’s share capital by €10.3 million through the issue and launch into circulation of the same amount of shares with a nominal value of €1 each, according to a statement filed by the company with the Alternative Investment Market (MAB).

The Socimi, which has been listed on the MAB since December, is in the middle of growing its residential portfolio. A month ago, the company invested €2 million in the purchase of around twenty assets in Barcelona, the city in which it has focused all of its operations. Most of its buildings are rental homes, although the manager also owns office properties and commercial premises spread over the metropolitan area of the Catalan capital.

Previously, two days before the end of 2017, the Socimi spent €1.6 million on a residential building on Calle Girona. The company’s Board of Directors comprises Mateu Turró, as the President of the company, and Francesc Ventura and Ralph Weichelt, who both serve as members.

At its stock market debut, Barcino was worth €19.1 million. Specialising in real estate investment and management, the Socimi is controlled (50.01%) by Barcino Management and is managed by a company linked to Vistalegre Property Management.

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

Urbas To Carry Out €2.2M Capital Increase & Appoint 3 New Directors

29 May 2018 – Eje Prime

Urbas is ploughing ahead. The real estate group’s Board of Directors is going to propose a €2.19 million capital increase to its General Shareholders’ Meeting through the offsetting of loans, as well as the appointment of three new independent directors, according to a statement filed by the company with Spain’s National Securities and Exchange Commission (CNMV).

The maximum amount of the capital increase will be €2,198,705.17, and the Board will be able to execute it for a maximum period of twelve months, following its approval, on one or more dates. Given that it is a capital increase involving special compensation and not a monetary contribution, preferential subscription rights will not apply.

The company’s shareholders will also vote for the re-election of the companies Robisco Investment and Quamtium Venture as members of the Board of Directors on a proprietary basis; they currently serve as the Chairman and Vice-Chairman of the company, respectively.

In addition, Urbas will propose the appointment of three new independent directors to fill three existing vacancies. The new board members in question are Adolfo José Guerrero Hidalgo, Pablo Cobo del Moral and Ignacio Sáenz de Santamaría Vierna.

The General Shareholders’ Meeting is scheduled to be held on 29 June. The company’s annual accounts will also be submitted for approval on that date, along with the Directors’ Report, the Report on the Remuneration Policy of the Board of Directors and the re-election of  Baker Tilly Fmac as the auditors of the accounts for the years 2018, 2019 and 2020.

Original story: Eje Prime 

Translation: Carmel Drake

Sabadell Set to Sell €10bn of Toxic RE in June After Receiving Deluge of Binding Offers

25 May 2018 – El Confidencial

Banco Sabadell has entered the home stretch of its mission to sell all of its toxic property, a rapid process that is expected to be completed in June. The entity has received a deluge of binding offers for the four portfolios that it currently has up for sale – Coliseum, Challenger, Makalu and Galerna – which have a combined gross value of more than €10 billion.

The first two portfolios contain foreclosed assets (REOs) and include Cerberus, Blackstone, Lone Star and Oaktree as potential buyers (in the final round); meanwhile, the other two portfolios comprise secured loans with real estate collateral (NPLs) and their potential buyers include Deutsche Bank, Lone Star, Bain Capital and Oaktree, according to confirmation from several market sources.

These proposals are now with the Steering Committee, which means that, once that body has given its verdict, the process will be passed to the Board of Directors, chaired by Josep Oliu (pictured above, right), which is the body that has to ratify the name of the winner.

In theory, this ruling is going to be issued within a matter of weeks, in June and, in any case, before August. Sources at the entity have declined to comment on either the finalists or the calendar.

Portfolios and the FGD

Having chosen the names of the winners, Sabadell will be able to close the sale of Challenger, the largest of all of these portfolios, with a gross volume of almost €5 billion; it is the only one that does not need approval from the Deposit Guarantee Fund (FGD), given that all of the assets contained therein come from the Catalan entity itself.

By contrast, the €2.5 billion in properties that comprise Coliseum come from the former entity CAM – Caja de Ahorros del Mediterráneo – and, therefore, need to be approved by the FGD, since it would have to cover 80% of the losses. The same applies to Makalu (€2.5 billion in loans) and Galerna (€900 million).

The need to receive this approval means that it is likely that the entity will have to wait until next year to deconsolidate all of these toxic assets, although it will be able to sign a sales agreement conditional upon that authorisation, like BBVA did in the case of the sale agreed with Cerberus last year to transfer all of its property, some of which is also subject to the FGD’s approval.

By contrast, this year, Sabadell could remove almost €5 billion in the form of Challenger from its perimeter, a step forward in terms of fulfilling the requirements of the European Central Bank (ECB), which is putting pressure on Spanish entities to remove the impact of a decade of real estate crisis from their balances sheets.

Solvia is being left out of the sale

At the end of the first quarter, the entity held €14.9 billion in problem assets, down by 17.6% compared to a year earlier, with an average coverage ratio of 55.2% (56.6% for doubtful debt and 53.7% for foreclosed assets), a percentage that serves as a reference for the funds when calculating their offer prices.

With the sale of all of these portfolios, the entity would reduce its real estate exposure to less than €5 billion.  Since the beginning of the crisis, that exposure has been managed by Sabadell’s own servicer: Solvia.

Some of the finalist funds had asked the entity to include Solvia in the transaction, according to Voz Pópuli, but in the end, that possibility has been ruled out by the bank, as it considers that the valuation of its asset manager is higher than the price that would be offered by funds.

In addition, as El Confidencial revealed, the servicer has created its own property developer, Solvia Desarrollos Inmobiliarios, which has €1,252 million in managed assets and which is also finalising an agreement with Oaktree to create a joint venture promoter.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Thai Hotelier Minor Acquires 8.6% of NH from Oceanwood

23 May 2018 – Expansión

The Thai hotel company Minor Hotels Group has entered the shareholding of NH Hotels with the purchase of a package of 30 million shares, representing 8.6% of the Spanish hotel chain’s share capital, from the British investment fund Oceanwood for around €190 million, as revealed by Expansión.

The agreement reached between Oceanwood and the company headquartered in Bangkok has been closed for a price of €6.40 per share, slightly above NH’s share price at the end of trading yesterday (€6.35). The hotel chain’s share price has appreciated by 5.83% so far this year. Evercore has been the advisory bank to Minor. On the legal, Baker has advised the Thai firm whilst Garrigues has advised Oceanwood.

Minor, whose shares are listed in Bangkok, has a market capitalisation of USD 6 billion and owns 161 hotels in 26 countries. The chain is the owner of the brands Anantara, Avani, Elewana, Oaks and Tivoli and also operates establishments owned by the chains Four Seasons, Marriott and St. Regis.

The purchase of this share package makes Minor NH’s third-largest shareholder, behind the Chinese holding company NHA, with a 29.5% stake and Grupo Hesperia, in the hands of the businessman José Antonio Castro, with 9%. Oceanwood will continue as the fourth-largest shareholder, with almost 5%, although it will strengthen its weight after exercising the conversion rights of a convertible bond that it subscribed to five years ago and which it will execute soon. The fund first invested in NH in 2013 by purchasing stakes owned by the savings banks and has grown its share over the last few years.

In this way, as a consequence of the conversion of all of NH’s convertible bonds, Oceanwood will hold 9.5% of the share capital post-conversion, assuming that all of NH’s convertible bonds currently in circulation are converted.

The exit of the Chinese

This shareholder move comes in the middle of the divestment process being undertaken by HNA, which in January announced that it had engaged JPMorgan and Benedetto, Gartland and Company to “review” its shareholder position in NH and to identify potential buyers.

That decision by the Chinese group came after Barceló’s failed proposal to merge its businesses with those of its rival NH. The offer, which was overwhelmingly rejected by NH’s Board of Directors, stirred up rumours of a takeover once again. Last week, the Chinese group revealed that, after receiving interest from various investors, it plans to put its 29.5% stake up for sale.

NH, with 380 hotels and around 59,000 rooms, closed the first quarter of 2018 with a net profit of €21.7 million, compared with losses of €24.8 million during the same period in 2017.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Santander Values its Stake in the JV with Blackstone at €1.566bn

16 May 2018 – Expansión

Santander has recorded on its balance sheet its 49% stake in the company that it has created with Blackstone for a value of €1,566 million. The stake has been recognised in the portfolio of investments in joint ventures and associated companies. The bank and the US fund, which controls the remaining 51% of the JV’s share capital, constituted the company on 22 March. The alliance, a conglomerate of companies grouped together under the parent company, Project Quasar Investments 2017, brings together the former real estate portfolio of Popular. It contains gross assets worth €30 billion, which have been appraised at €10 billion net under the framework of the transaction.

Meanwhile, the two partners have now agreed on the configuration of the Board of Directors for the joint venture. The governance body will comprise seven members. In line with the distribution of the share capital and its control of the management of the assets, Blackstone will have a majority of four positions on the Board, including that of Chairman.

Santander will be represented by three directors. One of them is Javier García Carranza, the executive to whom the entity chaired by Ana Botín has entrusted the process to clean up Popular’s balance sheet. García Carranza is the Deputy CEO of Grupo Santander and a member of Popular’s Administration Board, a transition body that will disappear once the legal merger of the two banks has been completed. García Carranza also represents Santander on the boards of Sareb, Metrovacesa and the real estate manager Altamira, amongst other companies.

The other directors linked to Santander that will sit on the Board of the joint venture are Carlos Manzano and Jaime Rodríguez-Andrade, specialists in real estate investments and asset recoveries, respectively.

Meanwhile, Diego San José, Head of Blackstone’s Real Estate division in Spain is going to be the Chairman of the company. Eduard Mendiluce, Jean Francois Bossy and Jean Christophe Dubois are the other directors who have been appointed by the fund.

In order to launch the company, Santander and Blackstone have subscribed a syndicated loan amounting to €7,332 million. Several banks have participated in the loan, which is led by Morgan Stanley and Deutsche Bank, including Bank of America Merrill Lynch, JP Morgan and RBS, as well as Blackstone itself, which has contributed €1 billion. The financing has been signed over a 5-year term and matures in 2023.

The sale of Popular’s real estate portfolio and the deconsolidation of the assets have resulted in a 10 point improvement in Santander’s core capital ratio. Its solvency now stands at 11%, the target for 2018.

Original story: Expansión (by M. Martínez)

Translation: Carmel Drake

Oceanwood to Strengthen its Position in NH Following €280M Capital Increase

8 May 2018 – Expansión

The British investment fund Oceanwood is going to strengthen its position in the hotel chain NH Hotel Group, of which it is currently the second largest shareholder with a 12% stake, following the capital increase that the company is expected to carry out in the near future.

The hotel chain is going to increase its share capital to finance a convertible bond issue undertaken in 2013, which is due to expire at the end of this year, but which may be exchanged for shares before the end of that period, in accordance with the conditions of the issue.

NH will handover 50.8 million shares to the bondholders, equivalent to 14.5% of the existing share capital. The company already has 7.5 million own shares, and so the capital increase will involve the issue of 43 million new shares, which at current market prices represents a total sum of around €280 million. With this operation, NH will manage to reduce its debt with the issue of new shares and will thereby advance with its objective to improve its level of leverage.

Of NH’s major shareholders, Oceanwood was the only one to participate in the issue, subscribing almost 30% of the debt, which means that its stake will amount to 15.5%, whilst HNA, with 29.5% of the share capital and Grupo Hespería, in the hands of the businessman José Antonio Castro, with 9%, will see their stakes in NH diluted. The price of the conversion was set at €4.92 per share back in the day, whereas NH’s share price closed yesterday at €6.43, which implies a 30% appreciation over the conversion price.

Although the bond is not due to expire until November, the Board of Directors has the authority to force its conversion ahead of time given that one of the conditions included to that effect in the brochure has been fulfilled. Specifically, the conditions of the issue indicated that in the event that NH’s share price rises above €6.39 for more than 20 days during a 30 day period, then the company could force the conversion. That situation was achieved last week. The board met on Wednesday to present the company’s results.

Last October, NH announced that it had fully repaid and cancelled all of the senior debt obligations issued amounting to €250 million, with maturity in 2019 and whose principal pending payment amounted to €100 million.

The group’s gross debt amounted to €736 million at the end of last year and the bulk of that debt is due to mature in 2023.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Colonial Will Increase its Share Capital by €180M to Finance Merger with Axiare

21 April 2018 – Expansión

The merger between Colonial and Axiare is moving ahead. The Socimi chaired by Juan José Brugera is expected to approve a capital increase at its next General Shareholders’ Meeting, scheduled for 24 May, to absorb the 13% stake in Axiare that it does not control yet. The capital increase will take place through the issue of 19.27 million new shares, which at current prices corresponds to a monetary value of around €181 million.

On 10 April 2018, the Boards of Directors of Colonial and Axiare approved the project to merge the two Socimis, which will give rise to a real estate giant with a portfolio of assets worth around €11 billion, which will place the new group very close to its rival Merlin, with assets of €11.254 billion.

This operation will go ahead after Colonial successfully completed its takeover of Axiare in February to acquire 87% of its share capital. The operation will involve the termination due to dissolution of Axiare and the block transfer of the Socimi’s assets to Colonial.

According to the approved exchange ratio, each existing shareholder of Axiare will receive 1.8554 shares in Colonial. To this end, the Catalan real estate company will submit to a vote by its shareholders the issue of a maximum of 19.27 million new ordinary shares with a nominal value of €2.50 each to pay for the merger exchange.

This operation will also be subject to a vote by the shareholders of Axiare, whose General Meeting is due to be held on 25 May on the first call and on 28 May on the second call, if the necessary quorum is not reached on the first call.

New Board

The items on the agenda for that General Shareholders’ Meeting include the appointment of Javier López Casado as a proprietary director, as a representative of Finaccess, which will then have two representatives on the Board after taking control of 18% of the group’s share capital. In this way, Axiare’s most senior governance body will comprise 11 members: four independent directors, two executive directors and five proprietary directors – two to represent the sovereign fund of Qatar, two to represent Finaccess and one to represent the Colombian firm Santo Domingo-.

On the other hand, Colonial is going to approve the distribution of a dividend amounting to €0.18 per share, up by 9%. The company is thus going to increase the remuneration to its investors with a third dividend payment after recovering it in 2016, following ten years of not paying the shareholders anything.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hispania Seeks “White Knight” to Improve Blackstone’s Takeover Bid

17 April 2018 – Expansión

Hispania is moving ahead and accelerating the search for a white knight to increase the bid for the Socimi. The real estate firm, which specialises in hotels, has engaged Goldman Sachs, UBS and JPMorgan, as financial advisors, and the law firms Freshfields and Uría Menéndez, as legal advisors, to look for alternatives to the takeover bid presented by Blackstone, which values 100% of Hispania at €1,905 million.

The US fund, which already controls 16.56% of Hispania, after it acquired the stake of the Hungarian-born magnate George Soros, announced its intention on 5 April to launch a takeover bid for the entire company at a price of €17.45 per share, which it would pay entirely in cash. The operation is conditioned on achieving the acceptance of at least 54,584,772 shares, which would allow Blackstone to take control of more than 50% of the total share capital. The US fund must submit its takeover prospectus to the CNMV before 4 May 2018.

Unsolicited offer

“Neither the Board of Directors of Hispania nor its management company, Azora Gestión, were aware of the aforementioned acquisition of shares by Bidco (a Luxembourg-based company controlled by Blackstone through which the operation would be carried out) or of its intention to formulate a takeover bid. As a result, it is an unsolicited offer”, confirmed the company yesterday in a statement sent to the CNMV.

Hispania also said that the Board of Directors will promote alternatives that “maximise” the value of the company. Blackstone has not been the only international fund to express interest in Hispania’s hotels. In this way, before Blackstone launched its bid for Hispania, five other investors expressed their interest in the Socimi without formalising firm offers, according to market sources speaking to Expansión.

Hispania is currently the largest hotel owner in Spain by number of rooms, with more than 13,100 rooms in 46 hotels and a gross value of €1,639 million (66% of its portfolio), and its purchase would represent a significant move that would place the buyer in a position of leadership at a time of strength in the tourism sector.

The manager’s roadmap

Until Blackstone’s takeover bid was announced, Azora’s roadmap involved: selling Hispania’s offices in a single transaction, an operation that had already been channelled towards the fund Tristan; selling the homes in a block deal; and expanding the hotel portfolio to also sell it as a block. Thus, Azora was planning to sell the whole company – without the offices or homes – with a transfer of control that would allow the continuity of the Socimi, before March 2020, when the entity marks its sixth birthday.

Hispania’s shares closed trading on the stock exchange yesterday up by 1.56% to €17.62 per share, in other words, 1% higher than the price offered by Blackstone.

Besides Blackstone, Hispania’s other main shareholders include Tamerlane, with a 5.99% stake, Fidelity (4.88%), BlackRock (4.02%), BW Gestao de Investimentos (3.64%), Axa (3.03%) and Bank of Montreal (3.01%). The US fund has already approached the company’s other shareholders to convey the benefits of the takeover.

The US fund’s offer for Hispania comes two months after Colonial successfully closed its takeover of Axiare. The Board of Directors of Axiare was also reluctant to accept the offer from its rival initially, however, in the end, it expressed a “favourable” opinion regarding the takeover.

Sources at Hispania affirm that the Board of Directors, with the assistance of the financial and legal advisors contracted, will pronounce on the takeover “in due course”. Hispania’s most senior executive body is chaired by Rafael Miranda, who was the CEO of Endesa until the energy company was taken over by the Italian group Enel. Meanwhile, Concha Osácar and Fernando Gumuzio, founding partners and directors of Azora Capital, are external directors.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Bankinter Continues to Fatten Up its New Hotel Socimi Atom

3 April 2018 – El Español

After the success of Ores, the shopping centre Socimi managed by Sonae Sierra and whose ownership Bankinter shares with the insurance company Mapfre, the bank has recently constituted another real estate investment company as an alternative way for its most select clients to generate greater returns from their wealth (…).

The company is called Atom. Another Socimi that, with a share capital of almost €25 million, started work three months ago from offices leased to it by the bank in the La Finca Business Park, in the Madrilenian suburb of Pozuelo de Alarcón.

No date set for its stock market debut

Although at first, the possibility was considered that Atom would make its stock market debut during the first quarter of 2018, that decision has now been delayed. “No date has been set for the stock market debut. It could happen at any time. In a matter of weeks or months”, say sources at the bank led by Dolores Dancausa (pictured above), the CEO (…).

Bulky portfolio in just 3 months

Nevertheless, and unlike Ores – which made its debut on the MAB on 22 February 2017 without a single asset in its portfolio – Atom is going to start its stock market life with a bulky portfolio of assets. In just three months, it has acquired around 20 hotel establishments.

The last six – including the Hotel Rey Don Jaime de Valencia- were incorporated at the end of March, when the Socimi took advantage of an asset divestment by the private equity firm Atitlán, led by Aritza Rodero and Roberto Centeno, the son-in-law of the President of Mercadona, Juan Roig. Atom added 900 bedrooms to its portfolio through that operation.

Although it has not been disclosed, sources in the sector consulted by this newspaper indicate that the other hotels acquired by Atom could be the 11 establishments that Banco Sabadell left out of the operation, closed in October, in which the entity chaired by Josep Oliu sold the hotel management platform HI Partners to the fund Blackstone for almost €631 million.

Whilst in the case of Ores, Bankinter engaged Sonae Sierra as a specialist shopping centre manager, for Atom, it has empoyed Global Myner Advisors Hotels Capital Invest (GMA-HCI), a company led by Víctor Martí Gilabert, which has proven experience in the management of hotel assets (…).

Atom’s Board

In addition to Martí Gilabert, on the Board of Atom – which is chaired by Eduardo Ozaita, who was recently appointed the Director General of the Commercial Bank of Bankinter, switching roles with Fernando Moreno, who has moved to lead Business Banking –  sits Esther Colom García, who has been hired as the Legal Counsel of the new Socimi (…).

Together with Ozaita, on Atom’s Board as Bankinter’s representative is its Director of Investment Banking, Jaime Íñigo Guerra, who also sits on the governing body of the Socimi Ores. Atom’s Board is completed by Antonio Riestra and Ignacio Díaz, the sole administrator of Otels Hospitality Services.

In theory, the idea being proposed by Bankinter is for Atom to make its debut on the MAB with a portfolio of hotels worth around €200 million, with two-thirds of the establishments located in holiday environments and the remaining one-third located in strategic urban nuclei.

The split of Atom’s share capital will be similar to that of Ores

To raise this share capital, Bankinter has committed to contributing around €20 million, the manager GMA-HCI around €10 million, and other institutional investors another €30 million. Most of the money, around €120 million, will be provided by Bankinter’s own private banking clients. The minimum investment per client will be €200,000, up to a maximum of 15% of each individual’s financial wealth.

Bankinter wants Atom to have a similar shareholder structure to that of the Socimi Ores, in which the financial institution holds a 10% stake (7.48% through the parent company and 2.54% through Línea Directa), the insurance company Mapfre holds 6%, the Castellón based companies Corporación Juan Segarra and Inmuebles Gil Comes hold 5% each, and the manager Sonae holds 3.75%. The remaining 70% is owned by Bankinter’s private banking clients.

Original story: El Español (by Juan Carlos Martínez)

Translation: Carmel Drake

Israeli Fund Adar Asks for Two Seats on Neinor’s Board

15 March 2018 – Expansión

The Israeli fund Adar is claiming its space at the table of Neinor’s most senior executive body. After taking ownership of 24% of the property developer and buying almost 18% of the real estate company’s shares in just one month, Adar has requested two seats on the Board of Directors.

To this end, Adar has asked that its request be included on the agenda of the next meeting, which is scheduled for 17 April at the first call, or, if the necessary quorum is not reached, for 18 April.

Adar has proposed the appointment of Jorge Pepa and Francis Btesh as proprietary directors. In this way, the group’s Board of Directors would comprise nine members, up from the current number, seven.

The last change in Neinor’s Board of Directors took place with the departure of Dominique Cressot, a Director who represented the fund Lone Star, which sold the last remaining share package that it owned in the company last January.

In his place, the shareholders appointed Alberto Prieta, Managing Partner of the Real Estate team at BDO, as an independent director.

Adar, which first acquired shares in Neinor when the firm made its stock market debut almost a year ago, is now the real estate company’s largest shareholder, ahead of the Bank of Montreal (5.2%), Norges Bank (5.06%), Invesco (5.02%), Wellington Management Group (4.96%) and Ksac Europe (4.2%). The fund controls a package worth €296 million.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake