HNA Seeks To Strengthen Its Position On NH’s Board

15 June 2015 – Expansión

The Chinese giant, which holds a 29.5% stake in the NH Group and has four directors on the Board, will ask the other shareholders to fix the number of board members at 11, in order to limit the advances of foreign funds.

HNA, the primary shareholder of the NH Group, with a 29.5% stake, will ask the hotel group to fix the number of members on the Board of Directors at 11, at the AGM on 29 June. HNA justifies the proposal, which has been included as an additional item on the meeting agenda, as being “in the interest of greater legal certainty”.

With this proposal, HNA is flexing its corporate muscles and seeking to close the door on NH’s foreign fund investors, by making the incorporation of new directors conditional on existing positions becoming vacant.

Currently, NH’s Board of Directors comprises 11 people, even though the company’s bylaws provide for a minimum of five members and a maximum of 20…The Chinese group already holds four seats on the Board and the Hesperia investor group has two. There are three independent directors and the Chairman (Rodrigo Echenique) and CEO (Federico González) also hold a seat each (…).

In order to stand up to NHA, three overseas fund managers (Oceanwood Capital, BlackRock and Henderson) purchased most of Banco Santander’s shares, which were sold on 21 May. Soon afterwards, Oceanwood, which holds a 7.7% stake, formally requested to join NH’s board (…).

The fear of the funds (minority shareholders) is that, if there is no increase in the number of independent directors, then HNA will strengthen its control over NH without having to launch a takeover bid (OPA) for the shares (…).

On the other side of the table is HNA, an Asian giant, which has demonstrated its desire to take control of the Spanish chain, since it first acquired a stake in the group in 2013. It seeks to continue as a major shareholder, but without acquiring 100% of its shares (…).

In parallel, HNA has opened the door to the Asian market to its investment company. Both companies created a joint venture with a Chinese majority, which will allow NH to debut in the country. In 2015, the Spanish chain will manage six hotels (in China) and the aim is to exceed 30 properties under management over the medium term.

Meanwhile, NH is continuing to improve its results. Between January and March, it generated revenues of €272.3 million and reduced its net losses by 24.7% to €29.1 million. On Friday, NH’s share price was down by 1.63% to €5.11.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

A Group Of Funds Takes Control Of Catalan Firm ‘Habitat’

29 May 2015 – Finanzas.com

A group of investment funds has taken control of the Catalan real estate company Habitat, after the judge gave the green light to the proposed agreement that they had submitted.

According to reports by El País, the company will now end up in the hands of firms such as Goldman Sachs, Bank of America Merril Lynch, Capston, Marathon and SC Lowy; whilst the Figueras family, which founded the real estate company, will retain a minority stake. The new owners will retain the current management team.

The company, whose debt initially amounted to €1,800 million, sought refuge in the new bankruptcy law at the end of last year after it proved impossible for it to adhere to the repayment calendar established under the previous agreement.

The investment funds have acquired Habitat after purchasing Habitat’s loans at a significant discount from banks and Sareb, the so-called bad bank, and they presented another proposed agreement to the Commercial Court number 3 in Barcelona, which was approved in the end.

The funds will become the new owners of the real estate company by converting their debt into equity.

Original story: Finanzas.com

Translation: Carmel Drake

Sacyr Begins Relaunch Of Testa’s IPO To Raise €300m

3 February 2015 – Expansión

Testa, a company controlled by Sacyr, which owns 99.3% of its share capital, will hold the annual meeting of its shareholders today. It is expected that the mandate of the real estate company’s Board will be renewed to approve the distribution of extraordinary dividends and contributions to shareholders through a reduction in share capital. These measures are conditioned on the launch of Testa’s IPO, through which the company seeks to raise at least €300 million.

Specifically, Testa’s Board will give the green light to a capital reduction of €669 million and the return of a further €527 million to its parent company. Sacyr will receive €1,188 million from its subsidiary for both of these concepts.

Sacyr has engaged JP Morgan, Morgan Stanley and Garrigues to coordinate the IPO. Although the percentage stakes (of the new shareholders) have not been fixed, the entry of new shareholders (which will dilute the current ownership structure) will be limited to a maximum of 30% of the capital, since Sacyr wants to retain its position as the controlling shareholder, with a stake of more than 70%. The banks tried to launch this transaction last year, but market conditions prevented it from going ahead.

The company will try again in 2015, at a time when companies have turned their gaze back to the stock market as a means of financing their businesses and growth plans. Currently, around twenty companies in Europe are looking to go public. In Spain, notable placements include those by Aena, Saeta Yield (ACS), Abertis Telecom and Talgo, amongst others.

Testa’s shares closed trading yesterday flat at €18 per share, representing a market capitalisation of €2,078 million. At this market price, the sale of 25% of Testa’s capital would generate revenues of €500 million.

The subsidiary is the jewel in Sacyr’s crown. It is one of the leading companies in its sector by market assets, with a leasable surface area of 1.37 million square metres and an occupancy rate of 97%.

Original story: Expansión (by C. M.)

Translation: Carmel Drake