Colonial to Enlarge Capital & Save SFL

24/03/2014 – Cinco Dias

The managing board of Colonial has decided to suplement the startup capital of €1 billion with €266 million more. The new enlargement was approved by the board on 21 January. Initially, the plan foresaw selling 20% of Société Foncière Lyonnaise (SFL) in which Colonial holds a 53% stake. Obtaining a new syndicated loan would allow payment of €1.759 million loan that expires at the end of the year.

(…) The Villar Mir Group that owns 20,27% of Colonial´s capital contributed by €300 million last year. This year the company will invest at least €50 million more. Villar Mir defeated Brookfield at the war on control over the real estate firm.

The U.S. private equity firm acquired 46% of syndicated loan valued at €1.759 million and revealed an intention of restructuring property sales and swapping the debt for assets. (…).

The nearest extraordinary shareholders´ meeting will take place on 8 April. (…) “Successful execution of the capital enlargement and obtaining a long-term syndicated loan will permit paying-off the current syndicated loan of €1.8 billion, keeping the majority stake at SFL and stabilizing the Loan to Value below 50%” – points out Colonial.

One of the most apposite steps taken by the real estate company was the creation of Asentia, its private “bad bank”. (…)

 

 

Original article: Cinco Días (Alberto Ortín Ramón)

Translation: AURA REE

Ex-Executives of Altamira & Sareb Buy Asentia

3/03/2014 – Cinco Días

Colonial transferred its real estate branch Asentia to consultant company Eneas, chaired by José Luis Contreras, an ex-executive of Altamira (Santander´s RE platform) with view to restructuring and maintaining the company´s liability.

Also, MainSpring, represented by César Goyache, ex-executive of Sareb and Alvarez & Marsal, has taken part in the transaction.

According to the sources with knowledge of the operation, Crédit Agricole and Colonial hold 20% of Asentia´s capital each.

At the extraordinary meeting in Barcelona in January, the managing board of Colonial agreed upon a €1.000 million capital enlargement, due to its €1.759 million debt expiring this year.

By now, Asentia has been put up for sale with debt equal to €1.428 million. (…).

 

Original article: Cinco Días (Alberto Ortín)

Translation: AURA REE

Villar Mir takes over Colonial

22/01/2014 – El Mundo

Yesterday, the shareholders of Colonial approved in an extraordinary meeting to increase the capital up to 1.000 million Euros. With this transaction the group Villar Mir will take over the real estate, reinforced as first partner with the 29,9% of the shares.

Colonial’s Executive Director, Pere Viñolas, specified that 79,2% of the shareholders voted in favor. He considers that the first step has been taken to refinance depts. Although the fund of the Canadian investment Brookfield has bought the 46% of the syndicated loan and therefore is its first creditor, Viñolas yesterday supported that “there is no risk” of “blocking” the debt restructuring and that Colonial works in order to achieve “a new debt structure that will pay the former”.

However, it is unknown how Brookfield will react. Yesterday, not even one fund representative took the floor to defend its own alternative. But, in spite of Brookfield’ s silence, the board presented the offer made by the Canadian fund and Viñolas, in a press conference, urged to increase the capital, according to Efe’s information.

A plan for increase

The plan contemplates a monetary increase up to 1.000 million, the sale of maximum 20% of SFL’s shares, in which Colonial is the majority shareholder of 53% and the acquisition of a new syndicated loan that will contribute to pay off the current one, which expires at the end of the year.

From these 1.000 million Euros, 500 are already guaranteed, since Villar Mir will deposit maximum 300 and other two investors- the Latin American investment firm Santo Domingo and the Andorran sicav Amura Capital- have promised to deposit 100 each. Regarding the remaining 500, Viñola strongly believes in the interest of the investors in participating in this increase, but just in case, the Board authorized the possibility of converting the debts into capital.

Villar Mir in 14th of January became the reference shareholder of Colonial, after buying from Royal Bank of Scotland (RBS) 19,33% of the real estate for 43,6 million. After the capital’s increase, the group aspires to control a maximum of 29,9% in order to avoid launching a takeover bid.

Source: El Mundo

Stock Market: Colonial Appreciates & Leaves the Price Offered by Villar Mir Behind

Stock experts have no explanation for the sudden rise in Colonial´s assets price observed in the last days. The news from January 2nd about the fresh capital injection by Juan Miguel Villar Mir (300 million Euros) has caused fall by 17.2%, then followed by another taper down by 15.9%. But in the last five sessions the titles climbed up by 58.15% and therefore set the price at €1.23 per asset, moving away from the price of €0.5 that Villar Mir is ready to pay. Yesterday the company on the Spanish Stock Market costed 279 million Euros while the best offer received from Villar Mir set its value at 112 million Euros.

What is the real price of Colonial? The last Net Asset Value (NAV) of the company made public in November last year shows €0.98 per share. Great European real estate companies quote with almost 20% discount on the declared NAVs. In case of Colonial, the hypothetical value could be punishable due to the company´s high indebtedness and its urgent necessity to capitalize itself as its syndicate credit exceeding 1.800 million Euros expires at the end of 2014. Since January 1st, its credit´s interest rate went up and now the company bears costs at 8% of it, namely 12 million Euros. If it extrapolated this year, the company would have to pay 144 million Euros.

Finally, the stock analysts remind that Colonial announced sale of its crown jewel, the French branch SFL that also suffers loss in value.

No matter what kind of logic drives the progressive adjustment of the assets in regard to the price offered by Villar Mir, the titles project a surprising upsurge keeping the market on tenterhooks. Analyst from M&G Valores, Nicolás López, says that “Villar Mir´s step in would rescue a real estate company that does not generate sufficient income to return the interest rate costs and by the deed would avoid causing its shareholders to lose money, but it does not justify the rises observed on the stock market. Buying now could be charged with significant risk (…)”.

Source: Expansión

Villar Mir Attracted by Jewels of Colonial

Focus on the patrimonial business, mainly on the offices, and not to get involved into the real estate development. This is the business plan of Juan José Brugera, the chairman of Colonial. His strategy had called attention of Juan Miguel Villar Mir, who has declared willingness to invest 300 million Euros and thus become the main shareholder in the quoted real estate company.

Colonial is already working on retaking strategy of asset rotation once it finalizes the capital enlargement. The management board of the firm has been considering various solutions for repairing its balance for last 2 years. Last week it announced fresh capital injection of 1.000 million Euros, out of which half is already assigned to Villar Mir group, to a SICAV of Mora Banc and the Colombian group Santo Domingo.

(…) Colonial possesses 49 office buildings split among Paris (managed by its subsidiary SFL), Madrid and Barcelona, amounting to 1.1 million square meters and valued at 5.222 million Euros.

At present the French portfolio (precisely the Parisian one) is the most important, both for surface (equal to 44%, compared to 29% of Madrid and 29% of Barcelona) and the revenues it brings (70% of total rents procedes from France (…)). Colonial is now considering selling a part of SFL in order to pay off the debt but the new investors set the sale maximum level at 20%.

Some of the assets have been released by now, like Casa de les Punxes in Barcelona for 25 millon Euros and the Ágora Towers in Madrid sold recently for 73 millones.

Apart from the strong portfolio of buildings situated in the big national market places and one of the most significant at the European level, Colonial´s power lies in its tenants as well. Companies like Aben-goa, Banca Cívica and Iberia in Madrid; Natixis and Hugo Boss in Paris; and Gas Natural, La Caixa and Accenture in Barcelona are only an example of the relevant occupiers of Colonial´s buildings.

Source: Expansión

Villar Mir to Inject 300 Million Euros into Colonial & Become its Principal Shareholder

Villar Mir Group, the owner of OHL, will become the main shareholder in the real estate company Colonial by injecting 300 million Euros. The company´s capital will extend to 1.000 million Euros, 60% of which is already covered.

Apart from Villar Mar, Santo Domingo Group and a SICAV of Banca Mora will contribute to the capital increase by injecting between 100 – 150 and 100 million Euros respectively.

Moreover, Colonial chaired by Juan José Brugera foresees sale of 15%-20% of its French subsidary, SFL, through which it would gain additional 400 million Euros. For the rest of the liabilities, the company will sign a loan contract of 600 million Euros with Credit Agricole. The final target is to reduce the indebtedness from the present 70% to 50% in debt assets.

Colonial owns a 3.800 million debt, out of which 1.800 millions corresponds to a syndicate loan to overcome at the end of 2014. In the first three quarters of 2013, the group registered a 369 million loss (83%) compared to the same period in 2012, due to its high indebtedness and its branch Asentia, gathering its toxic assets.

Special Summit

The Administrative Board of Colonial called on the Extraordinary General Meeting of shareholders in Barcelona on January 20th, at 12:30 the first call, and the next day, namely January 21st 2014, the second call.

Before the transaction, the real estate company was suspended before the opening of the market. Colonial´s securities, from going up to 2.2% at the return to quotation after 10 hours, down to 17.29% at the closing with 0.866 Euros.

Source: Expansión

Colonial Shoots Up by 3% After Selling Agora Towers in Madrid

The Colonial real estate assets receive today on the stock market a confirmation of the sale of offices complex Agora Towers in Madrid for 73 million Euros, cancelling its bilateral debt related to the asset maintained with Sareb. The company´s shares surge by more than 3% in the continuous market up to 1.13 Euros.

(…) The Agora Towers is a complex of offices which covers 30.650 square meters of space and it is situated nearby the ring road M-30 of the capital, close to the  Arturo Soria Street exit, as Colonial informs.

The object consists of two office buildings of 14 floors, both more than 50 meters high and joined by a crystal structure. They dispose of common areas and a parking lot.

Colonial closes the sale of the building while it works with its banks on ending the refinancing a 3.486 million Euros financial debt which probably will be overcome in 2014.

(…) The real estate continues to value all the strategic options in order to cut the amount of the debt. Among others there are capital increase and partial or total divest in the participation it has in a French patrimonialist Société Foncière Lyonnaise (SFL).

Source: El Confidencial

Colonial will try to refinance 3.000 million Euros.

The real estate company Colonial faces the year 2013-2014 with important changes in the horizon. After six years of financial and corporate stability, with several banks and international funds leading the company after the exit of the former president and main shareholder Luis Portillo, Colonial is working in a profound change in its structure.

Colonial´s managing director, Pere Viñolas, confirmed Expansión, at the beginning of 2013 that this year would be “problematic” for the company, and therefore a negotiation between banks and shareholders would be necessary.

The current situation of the company, as in any other Spanish real estate company, is serious due to the high debt it drags along since the years of the real estate boom. Its financial liability reached on the 30th June 4.916 million Euros.  A debt which is divided between its different business lines, as 2.100 million Euros correspond to their patrimonial activity in Spain, around 1.400 million Euros to the activity in France and 1.415 million Euros to its subsidiary Asentia, a company created to hold the more problematic residential assets, such as apartments and land, as well as the subsidiary for malls Riofisa.

Colonial established 2013 as the timeline to refinance around 3.000 million Euros of that debt, although only 139 million Euros are due in the second semester. The main problem would be the 1.800 million Euros it needs to pay in 2014, which will be impossible to return with biannual earnings of 100 million Euros.

With this situation in mind, Colonial is studying various alternatives. The first one would be to give way to new investors, with cash, in order to restructure the company. The main candidate is Villar Mir. The businessman, who controls the construction company OHL, has offered the acquisition of 30% of the capital of the company from banks. However, the negotiations which seemed well under way in March, now seem failed, and new candidates, such as Torreal and an international fund, are starting to sound.

The main hurdle for these negotiations seems to be the high debt of the group and in Asentia. For this reason Colonial would like banks to keep this subsidiary, exchanging debt for participative loans. But, in exchange creditors claim that the real estate company should give up the French company SFL, the jewel of its portfolio.

The sale of this subsidiary would mean important earnings for Colonial but would leave it without its main source of income, as 70% of its turnover comes from Paris. 70% of the values of its assets correspond to the French subsidiary. (…)

Colonial bleeds to death.

Colonial bleeds to death. The Spanish real estate company, instead of recovering from its frail economic situation, has registered 308 million Euros in the red in the first half of the year. This means an increase of 73% in reference to the same period of 2012.
Asentia, its bad bank, is the main burden for this company specialized in prime assets. For this reason, the main target for Colonial is to get rid of this company, still on sale. Without taking into account the effect of the housing and land business of Asentia, the results of Colonial would reach a benefit of 87 million Euros, 9% less.

The real estate company is also considering all kind of alternatives to overcome its precarious situation and to reduce the debt of the mother company in around 600 or 700 million Euros, a debt which reaches more than 2000 million Euros.

The debt of the company reaches 75%, as declared by its managing director Pere Viñolas, at the last shareholders meeting. The sale of assets or the extension of capital are its two main chances. Although the company presided over by Juan José Brugera has not taken a decision yet.

The company is also considering the sale of the jewel of the crown: its French subsidiary, Société Foncière Lyonnaise (SFL). As well as in Spain, the office market is starting to feel the effects of the weakening of the French economy although the prime assets are still holding on. SFL also contributed with up to 12 million Euros to the accounts of Colonial, 24% more compared to the same semester in 2012.

As for the office market in Barcelona and Madrid, the company points out in its results that the prices are reaching “historically low levels”.

So stands the sector.

COLONIAL

The real estate company had losses of 24 million Euros due to the impact of Asentia, the non strategic assets subsidiary, that the company wishes to get rid of.

MARTINSA FADESA

The developing company handed in during the first quarter of the year 15% more units that during the same period in 2012 and sold 77 units off plan, but all of them in the international area.

METROVACESA

The real estate company, controlled since yesterday in 99,8% by the banks Santander, Bankia, BBVA, Popular and Sabadell after its exit from the stock market, obtained gains in its residential area of 1,5 million Euros, with a negative margin of 1,9 million Euros for the sale of 11 properties.

QUABIT

The real estate company, whose parent company (Rayet) is in creditor´s meeting, assures that the first months of the year have shown a “descent in the volume of activity within the real estate sector”.

REALIA

The company, controlled by Bankia and FCC, and where Sareb could enter through a debt capitalization, assures that the gains in the residential activity “are still affected by the credit restrictions”.

REYAL URBIS

The real estate company presided over by Rafael Santamaría, that requested a creditor´s meeting in February, is one of the most affected ones, as its main business is the development. In its results for the first quarter, it confesses a “stagnation” of the commercial sales due to “the lethargy within the real estate sector”.