Tag: CAM

Phoenix Buys Hotel Intercontinental In Torre Pacheco

18 January 2016 – La Opinión de Murcia

A Chilean group has acquired the five-star Hotel Intercontinental La Torre from Polaris World, the property developer from Balsicas, which filed for liquidation following the suspension of payments that ended with the transfer of the majority of the homes that it had constructed in urbanisations in Murcia to Sareb.

The new owner of the property, considered the jewel in the crown of the company created by Pedro García Meroño and Facundo Armero, is the company Phoenix, which already owns a luxury resort in Marbella called La Quinta. The so-called bad bank is also negotiating sales operations with a Spanish chain, which, if they materialise, may result in the sale of other assets by the property developer.

The Chilean group Phoenix is a business conglomerate backed by family capital, headquartered in Santiago de Chile. It holds investments in the real estate, tourism, renewable energy and finance sectors. One of its most high profile projects is Haciendas Talinay, a megaproject involving real estate and tourism developments located to the north of Santiago, in the IV Region of Chile, covering a surface area of 25,000 hectares, along 23 km of the Pacific Ocean coast.

Besides the Hotel Intercontinental La Torre, the Chilean group has acquired a retail centre containing a number of restaurants.

Polaris had constructed another five star hotel in Torre Pacheco called Intercontinental Mar Menor, which has 64 rooms.

The majority of Polaris’s urbanisations that have golf courses were transferred to the company IRM, which was constituted by the banks that had financed the company’s expansion until the burst of the real estate bubble halted its plans in their tracks….However, most of Polaris’s assets ended up in the hands of Sareb, which is now negotiating other operations. Sareb’s President, Jaime Echegoyen, declared in Murcia last May that he expected to see options to sell homes constructed by the property developer from Balsicas “in a piecemeal fashion”. (…).

The purchase of the Hotel Intercontinental, which has been closed to the public since 2013, is considered as an example of the interest that investor groups and tour operators have in Murcia. It is hoped that the operation will represent a new start for the region, which has endured severe economic hardship in recent years, since the crisis put a stop to the ambitious tourism projects of the boom years (…). CAM and Banco de Valencia both become major creditors of Polaris World, which ended up transferring the hole caused by debts with Polaris, which reportedly amounted to around €900 million, to Bankia.

Meanwhile, legal investigations that are being undertaken, following the collapse of CAM and Bancaja, have identified irregularities in terms of the granting of loans to the company from Balsicas.

Original story: La Opinión de Murcia

Translation: Carmel Drake

GE Finalises The Sale Of Its Banking Business In Spain

16 December 2015 – Expansión

GE Capital Bank is finalising its exit from Spain. The financial subsidiary of the US multi-national is holding negotiations with several investors to sell its entire loan business in the country. According to various financial sources, the business is primarily mortgage based and has a volume of almost €600 million.

The multi-national company has engaged PwC to manage this operation, known as Project Zágato.

There are three key candidates on the list to take over GE Capital’s portfolio, namely: Blackstone, which has experience in the management of banking mortgages after its acquisition of Catalunya Banc’s loans; Oaktree, which closed a similar operation with Bankia earlier in the year; and Evo Banco, owned by Apollo, which is looking to grow its assets through this type of portfolio, like it did with a portfolio from Citi in April.

The mortgages that GE Capital has put up for sale have a default ratio of 30% and the majority come from loans that the US entity granted through APIs (real estate agents).

The Australian fund Pepper Group is currently managing the portfolio. The other businesses that the Group has in Spain, mainly consumer financing, have been maturing in recent months.

GE Capital’s exit from Spain comes in response to a change in the multi-national company’s strategy at the global level. At the beginning of the year, the US group decided to divest the majority of its financial activity to focus on its industrial business involving turbines, aircraft engines and medical equipment, amongst others. At the time, the group had financial assets amounting to $500,000 million (€455,000 million).

Strategic shift

The multi-national took this decision due to the commercial risk that the financial arm of its business represented when the financial crisis hit in 2008, despite the fact that it generated half of the group’s profits.

Since then, GE Capital has been selling off parts of its business through agreements such as the one reached with Wells Fargo in October, for the transfer of assets amounting to $32,000 million. Just over a year ago, when its financial unit had not yet been dismantled, it sold part of its consumer business in Sweden, Norway and Denmark to Santander, for €700 million.

The group began to withdraw from Spain at the beginning of 2015, when it delisted itself from the Spanish banking register. At the time, it had negative reserves of €220 million as a result of the losses accumulated over several years, due to its high default rate.

The entity first started recording losses in 2008 with €13.6 million and did not manage to emerge from the red until 2014, when it recorded profits of €53 million.

At the end of 2014, GE Capital Bank held assets worth €524 million, according to data from the AEB.

Before the outbreak of the crisis, GE Capital had partnerships in Spain with CAM and BBK.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Sankaty Buys CAM’s RE Companies From Sabadell

4 December 2015 – Expansión

The fund Sankaty is finalising the purchase of a large package of real estate subsidiaries from Banco Sabadell, which the entity inherited from CAM. The US investor, which is itself a subsidiary of Bain Capital, has won a competitive auction held as part of Project Chloe, which will be signed before the end of the year, according to market sources.

The operation includes stakes in the companies’ shares, as well as debt, together worth €800 million. According to various sources, the sales price will range between €200 million and €250 million, which represents a discount over the nominal value of around 30%.

By purchasing the companies’ shares and debt, the fund will exert direct control over their real estate assets: land, work-in-progress property developments and finished properties.

This is Sankaty’s second major operation in Spain in 2015. In May, the fund acquired 40 large real estate loans from Bankia, worth €500 million.

Like many other overseas investors, Sankaty is committing itself to the acquisition of land and work-in-progress property developments in the hope of benefitting from the recovery of the Spanish economy, with an improvement that is already taking shape in the real estate market. These funds are joining forces with local property developers and, by purchasing at deep discounts, are hoping to obtain returns on their investments of up to 20%.

For Project Chloe, Sankaty will delegate the management of the assets to Altamira Inmuebles, the management platform owned by Apollo (85%) and Santander (15%), which has advised the fund during the process.

For Sabadell, this divestment is the latest in a series of similar deals undertaken in recent months, such as Project Cadi, which involved the transfer of €240 million of property developer loans to the US giant Pimco and the platform Finsolutia. In addition, it sold a portfolio of written-off receivables worth €800 million to the Malaysian fund Aiqon and it is negotiating the transfer of 3,000 rental homes, as part of Project Empire.

Exposure to real estate

Just like the rest of the Spanish financial sector, Sabadell is trying to reduce its exposure to real estate by combining the sale of homes through its network – its subsidiary Solvia is responsible for this – with the sale of portfolios to large international funds.

The bank, led by Josep Oliu, has one of the highest degrees of exposure to the real estate sector, due, in large part, to its purchase of CAM in 2011, although that was partially covered by an asset protection scheme (un ‘esquema de protección de activos’ or EPA) of up to €14,000 million. The entity has been working for several quarters now to reduce its volume of problem assets, which amounted to €22,350 million in September, and in recent months it has managed to stabilise its balance of foreclosed assets at €9,200 million, i.e. it has reached the point where the amount of (newly foreclosed) properties being incorporated onto its balance sheet is lower than the amount (of previously foreclosed properties) it is selling.

As the entity explained when it presented its results for the third quarter, it sold 7,654 foreclosed assets between January and September 2015, which represented an increase of 6% compared with the same period in 2014, and it achieved this even though it offered lower discounts on those properties compared with prior year.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Sareb Is Selling The Assets It Inherited From Polaris

7 May 2015 – Expansión

The company has appointed N+1 to manage the sale of 3 golf courses, two 5-star hotels and several residential estates.

Sareb wants to cut its ties with one of the ‘great chapters’ of the real estate bubble as soon as possible. In the last few days, the company chaired by Jaime Echegoyen has started the process to dispose of the property it inherited from Polaris World, by putting a portfolio with a nominal value of €500 million up for sale. The market price may amount to less than half of that value.

The portfolio comprises three golf courses, two five-star hotels and several residential complexes, built in Murcia by Polaris, which Sareb inherited in the form of property developer loans from Banco Valencia and Bankia. The sale also includes loans with real estate collateral that have not yet been foreclosed.

Sareb has appointed N+1 to manage the process and according to sources at funds consulted by Expansión, the firm has already distributed information to potential investors (corresponding to the so-called) Project Birdie.

The assets and loans up for sale come from Inversiones en Resorts del Mediterráneo (IRM), a company created in 2009 by Bancaja, Banco de Valencia, Popular and CAM to manage the Polaris assets that were left after the property developer’s debt was restructured.

Sareb’s decision to sell has generated confusion for the other two creditors, Banco Popular and Sabadell – following the latter’s absorption of CAM – because they were not notified (in advance) and because they believe that the best way of maximising the value from IRM’s assets is a block sale, given that they comprise a single residential estate and six golf courses. As a result, it is likely that these entities will contact Sareb over the next few days with a view to repositioning the sale.

When IRM was created, the company held assets worth €991 million, although by the end of 2013 – the latest available accounts – they had deteriorated (in value) by almost €500 million. The owners of its capital are Sabadell – covered by CAM’s EPA (Asset Protection Scheme or Esquema de Protección de Activos) – Bankia, CaixaBank and Popular.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake