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

FCC Wins Legal Ruling Against Blackstone & Goldman Sachs

1 December 2016 – Expansión

A judge from the Commercial Court in Barcelona has dismissed the lawsuit filed by GSO, one of the funds owned by Blackstone, and by Goldman Sachs against the legal agreement approved for the refinancing of FCC‘s debt. As a result of the agreement, the construction company had managed to refinance a tranche of its debt (€1,350 million) at a significant discount (but GSO and Goldmans opposed the deal).

Although the refinancing was backed by 93% of FCC’s creditors, Blackstone and Goldman Sachs opposed the operation and appealed to the courts for damages caused amounting to around €295 million. The judge has now rejected their claim, which cannot be appealed to a higher court.

In January 2015, the Commercial Court of Barcelona validated the judicial approval, which allowed the Spanish construction company to apply a discount and reduce the cost of a tranche of its corporate debt amounting to €1,350 million.

The law firm Linklaters advised FCC in the financial restructuring process and has defended the interests of the construction group against the lawsuit filed by the funds. Uría also acted on behalf of the banks (Bankia, BBVA and CaixaBank), who participated in the lawsuit as a party affected by the appeal, whilst a lawyer from Jones Day defended the interests of GSO and Goldman Sachs.

93% of the banking syndicate accepted the new financing conditions, which basically involved accepting a discount of 15% through the repayment of debt amounting to €900 million using €765 million raised during the company’s most recent capital increase. The outstanding loan balance, around €450 million, is being repaid at (an interest rate of) 5%.

The opposing creditors included overseas investment funds such as Blackstone (GSO) and credit institutions such as Burlington and Ice Focus. The foreign banks included Goldmans, Barclays, Credit Suisse and Merrill Lynch, amongst others. GSO and Goldmans ended up taking the case to court, but the judge has ruled against them.

The claimants tried to link the lawsuit in Barcelona with an appeal in London where another group of FCC creditors has filed a case for the early repayment of their investment through the issue of convertible bonds amounting to €450 million because they considered that the Spanish company had breached one of the suspensive clauses of the contract relating to the non-payment of debt (default). Blackstone (through GSO Capital) was one of the London-based claimants. Given the legal protected afforded to bondholders in London, FCC was obliged to suspend the process to convert bonds amounting to €32.75 million.

In the ruling in Spain, the judge in Barcelona rejected the existence of a link between the resolution regarding the early execution of the bonds and the validity of the restructuring of FCC’s debt.

Original story: Expansión (by C. Morán and G. Trindade)

Translation: Carmel Drake