Riu Hotels Wins a Small Victory Over Casanova in the Dispute Regarding Edificio España

1 March 2019 – El Español

A small victory (bringing the total to two) for Riu Hotels in the fight for ownership of the commercial space in Edificio España. The judge has dismissed the precautionary measures that the Baraka group, owned by the Murcian businessman Trinitario Casanova, requested to prevent the registration of the property in the name of the hotel group.

The magistrate has rejected the claim on the basis that there is no evidence, “in a clear and unequivocal way, of the relationship that must necessarily exist between what is claimed in the lawsuit and what is recorded in the Property Registry”. Specifically, Baraka requested that the inscription in the registry should include a note establishing the existence of a dispute over the ownership status.

The objective of that measure is to ensure that any possible investor in the commercial space knows that problems may arise in the future regarding the ownership. Nevertheless, the magistrate considers that the group owned by Trinitario Casanova has not proved its ownership of those spaces in the correct way.

Baraka is going to appeal

Specifically, and according to explanations provided by the group, there is a discrepancy between its lawyers and the judge because the lawsuit against the hotel firm was made directly by Baraka’s parent company, rather than by the company that the group used to purchase Edificio España (and which was subsequently transferred to its parent company ahead of the sale to Riu).

This is the second time that the courts have rejected Baraka’s requests, which in the opinion of Riu Hotels is good news. “We are continuing to work to open Hotel Riu Plaza España in the summer of 2019”, said the group in a statement to this newspaper.

The decision by the judge will be appealed by the Baraka group (…) and the Murcian group is convinced that it is in the right.

Original story: El Español (by Arturo Criado)

Translation: Carmel Drake

Riu Wins Legal Battle over Ownership of Edificio España

15 November 2018 – Preferente

On Thursday, the judge of the Court of First Instance number 51 of Madrid rejected the provisional measure requested by Grupo Baraka against Riu Hotels regarding Edificio España, where the hotel chain is finalising the construction of the largest hotel in the centre of the Spanish capital.

The judge sided with Riu and ruled that Grupo Baraka must pay the legal costs. Baraka sought to record in the Property Registry that an open litigation case existed regarding the ownership of the building, but that claim has been rejected by the court.

Riu considers that the legal ruling clearly shows “the lack of basis imposed by Mr Casanova and his business group, which represents an important step for clarifying that Riu is the sole owner of the property”.

The hotel chain led by the siblings Carmen and Lui Riu expects to open its new hotel in Madrid, the jewel in the crown of the Riu group, next spring.

Original story: Preferente (by R. P.)

Translation: Carmel Drake

Centerbridge & Blackstone Join Forces to Bid for Santander’s Ciudad Financiera

13 September 2018 – Expansión

A consortium led by the US funds Blackstone and Centerbridge is emerging as the main favourite to buy Banco Santander’s headquarters in Boadilla del Monte (Madrid), in one of the largest real estate operations of the year in Spain, which is set to exceed €3 billion.

The court that is overseeing the creditors’ bankruptcy of Marme Inversiones, the company that has owned the so-called Ciudad Financiera Santander since 2008, has asked the parties interested in purchasing this asset to submit their binding offers by Monday 17 September at the latest. The objective of the bankruptcy administrator is to use the funds raised to repay Marme’s debt in full.

According to market sources, the funds GSO (a subsidiary of Blackstone specialising in restructured debt) and Centerbridge are preparing a joint offer that could amount to €3.1 billion. These investors are negotiating to finance their proposal with a loan that could be led by Deutsche Bank.

Second attempt

Both GSO and Centerbridge are now creditors of Marme, given that they purchased some of the debt from the banks that loaned money to the company back in the day. Their bid could be pitted against others from creditor funds such as Avenue Capital, according to sources close to the process.

During the creditors’ bankruptcy, which began in 2014, GSO and Centerbridge already tried to take control of the company, with a proposal to buy Marme’s share capital and retain the current debt. It was a similar strategy to the one pursued for several years by Aabar (an Abu Dhabi fund) together with the British-Iranian investor Robert Tchenguiz, after buying some of the debt granted to Marme by the bank RBS.

But the administrator has decided to conduct a formal auction so that the interested parties can bid together for the Ciudad Financiera and whereby allow all of the liabilities to be repaid. The creditors believe that offers above €3 billion will be necessary to recover all of the principal and interest.

Just as Blackstone and Centerbridge seem willing to formalise an offer in compliance with the conditions established by the judge, it is not clear whether Aabar is going to participate in the auction. In recent months, the fund has been caught up in a legal dispute with Tchenguiz regarding their joint investment in the company that currently owns the Boadilla campus.

The Kuwaiti fund AGC Equity Partners is also analysing the possibility of submitting an offer for the Ciudad Financiera. Almost two years ago, that firm submitted an offer for €2.7 billion to acquire the headquarters of the Spanish bank, but it did not get the go-ahead because the creditors’ bankruptcy was in an incipient phase and because Santander threatened to exercise its right of first refusal to buy back its offices.

Long-term rental

The investors Glenn Maud and Derek Quinlan, who already owned the Citi skyscraper in London, purchased the headquarters of the Spanish bank in 2008 for €1.9 billion, for which they used a loan from a group of banks led by RBS. Shortly after the acquisition, problems started with meeting the conditions of the loan, which ultimately led to the creditors’ bankruptcy of Marme Inversores, one of the instrumental companies created by Maud and Quinlan to carry out the transaction (…).

The main appeal of the Ciudad Financiera is the fact that the bank chaired by Ana Botín has committed to remain as the tenant for 40 years, until 2048. On that date, the Spanish entity may negotiate an extension to the lease contract or repurchase the property.

Three options

Once the offers have been presented next Monday before the Mercantile Court number 9 of Madrid, which is leading the bankruptcy, three possible alternatives may ensue.

If there are several attractive bids, the judge may open a process to competitively improve the prices proposed. If there is only one offer, of an appropriate value to pay the creditors, then it may be accepted immediately (…).

The last possibility is that the offers do not reach the estimated valuation. In that case, the judge may change the strategy and allow the piecemeal sale or liquidation of the different liabilities of Marme Inversiones (…).

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

Blackstone Offers €3bn+ for Santander’s Ciudad Financiera HQ

10 September 2018 – El Confidencial

Santander’s Ciudad Financiera, the operating headquarters of the bank chaired by Ana Botín in Boadilla del Monte (Madrid), is being put up for auction five years after its owner, the company Marme Inversiones 2007, owned by several investment funds, filed for bankruptcy. After an arduous legal process whereby the bankruptcy administrator and the court managing the liquidation has released the asset, the central offices of Spain’s largest financial institution have been put on the market in search of a buyer.

According to financial sources close to the process, one of the most interested parties is Blackstone, the US hedge fund that has become Santander’s largest real estate partner after it purchased half of its portfolio of toxic assets last year. The US fund is negotiating the finishing touches for the presentation of its offer for the building where the bank employs almost 7,000 employees, including the office of the President, Ana Botín. According to the same sources, Blackstone is debating whether to participate in the auction by itself or to team up with the other creditors that supported the purchase of the Ciudad Financiera in 2008.

Of those, the presence of ING, HSH Nordbank, CaixaBank and Bayeriche Landesbank stand out, which 10 years ago granted a €1.575 billion loan to Propinvest to acquire Santander’s largest real estate asset on a “leaseback” basis. Other entities also participated in that loan including Deutsche Postbank, Royal Bank of Scotland and Raffeisen Zentralbank, which in 2011 started to sell its stake in the loan to vulture funds at significant discounts on the nominal value, when the owner started to realise that it could not afford to pay the debt.

One of the players that purchased that debt was Blackstone, together with other similar funds, such as Centerbridge and Avenue Capital. According to other sources, those investors are seriously considering submitting a joint offer on 17 September, the date on which the interested parties have to appear before the judge. That date is the one that has been set for the binding offers for all of the assets to be processed. If none are received, which is unlikely, then the Ciudad Financiera will have to be split up and sold off piecemeal.

According to these sources, Blackstone is now the main candidate, after two Arab groups placed tentative offers on the table that never proved successful due to legal wrangling and the lawsuits filed by some of the creditors, such as the Iranian Robert Tchenguiz. The investor, who owns several properties in London and is known for his idle lifestyle, was another person to take advantage of Propinvest’s bankruptcy to acquire debt at low prices and whereby become a significant creditor. Nevertheless, his problems with the Law – he ended up being arrested – have ruled him out of the process to take ownership of all of the Ciudad Financiera.

Arab interest

The player that came very close to acquiring Santander’s headquarters was AGC Equity Partners, a Kuwaiti fund with €3 billion under management, which received approval from Mercantile Court number 9, which was leading the bankruptcy of Marme. But its bid, which amounted to €2.5 billion, now needs to be updated, given that, according to various sources, the debt alone of the special purpose vehicle reached €2.8 billion, including senior and mezzanine. Therefore, the offers must exceed at least €3 billion, which means that this auction is going to turn into one of the largest real estate operations of the year.

The attempt by AEG, which was suspended when Ana Botín exercised the right of first refusal over Ciudad Financiera, came at the same time as the bid from Aabar, a company from Abu Dhabi, owned by IPIC, the owner of Cepsa, now renamed Mubadala. According to those sources, that fund is no longer interested in the auction and Santander has no intention of exercising its preferential right, as acknowledged by official sources at the Spanish entity.

The main attraction of Ciudad Financiera is that Santander, which financed the first operation with a loan amounting to €304.6 million to pay the VAT on the purchase, has committed to remain as the tenant of the property for the next 40 years, which means that the rental income is guaranteed.

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

Martinsa Fadesa Puts Batch Of Assets Up For Sale For €67M

5 October 2016 – Expansión

Martinsa Fadesa’s bankruptcy administrators have put a new batch of assets up for sale, under auction. The portfolio include estates, plots of land and even, several golf courses, with a combined value of, at least, €67 million. The deadline for the submission of offers will close on 3 November.

Specifically, the real estate company, which has filed for liquidation, has put the company Casasola Explotaciones Agropecuarias up for sale – it is an associate of the Martinsa Fadesa Group and the holding company owns a 48% stake in it – for a minimum price of €32.5 million. This company is the owner of several estates in the province of Valladolid, according to the website that has been created to provide information about the company’s liquidation.

In addition, the real estate company, which was controlled and chaired by Fernando Martín, has put Urbanizadora Club de Campo de Logroño up for sale, whose assets include plots of land and homes in Sojuela (La Rioja) as well as the Real Club Náutico de Sanxenxo, for minimum prices of €8.6 million and €162,000, respectively.

Meanwhile, the company has launched an auction for Guadalmina Golf, a company in which the holding company holds a 31.82% stake and whose main activity is the operation of three golf courses (two 18-hole courses and one 9-hole course), in the municipality of Marbella (Málaga). The minimum price to participate in the bid is €7.95 million. Martinsa Fadesa also wants to sell Inversiones Inmobiliarias Rústicas y Urbanas 2000, owner of an estate in El Molar (Madrid), for a minimum price of €17.9 million.

Martinsa Fadesa was declared insolvent in July 2008, with debt amounting to €7,000 million. The liquidation process began before the summer of 2015 after a court agreed months earlier to open this phase of the process for the real estate company and another five debtor entities.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Hotel Incosol Is Sold To A Spanish Hotel Group For €20M

26 February 2016 – El Mundo

The iconic Hotel Incosol in Marbella was sold on Tuesday (23 February 2016) to a Spanish hotel group and the consideration paid, more than €20 million, is thought to be sufficient for the workers to receive €2 million, according to reports from the lawyers advising the bankruptcy proceedings of the JALE group, which owns the hotel.

According to those sources, the buyers have also purchased the brand, and so it is clear that the intention is to revive the luxury establishment and benefit from the name that it has made for itself in health tourism since the 1970s. According to these sources, the banks – Sareb and Banco Sabadell – have ended up accepting a significant discount on the debt, which amounted to approx. €30 million in total.

The operation has been made possible, according to the sources, by the diligence of the judge of the Cádiz court, Manuel Ruiz de Lara, who authorised the bankruptcy administration to sell the hotel in its entirey (and not piecemeal) and for the money obtained to be paid to the bankruptcy creditors.

In any case, it is likely that a dispute will arise with the Social Security authorities, which will end up in the courts. Nevertheless, the money for the 158 workers seems to be guaranteed.

In fact, less than a year ago, the Social Security authorities opposed the sale of the hotel to a buyer, after negotiations had taken place with up to 40 different parties interested in acquiring the property. According to sources close to the bankruptcy proceedings, the debt with the Social Security amounted to around €5 million.

The Incosol Hotel was the last large asset left to be liquidated by the Cádiz group JALE, which is immersed in bankruptcy proceedings in which the owner, José Antonio López Esteras, has filed complaints to the previous bankruptcy administrators, as well as to the General Council of Judicial Power regarding the actions of the previous judge, Nuria Orellana.

Original story: El Mundo

Translation: Carmel Drake

Judge Lets Villar Mir Resume Work On Canalejas

3 November 2015 – Expansión

The judge at lower court number 54 in Madrid has lifted the temporary suspension imposed on the construction of Project Canalejas, located in the centre of Madrid.

The work to refurbish the complex – where Grupo Villar Mir wants to construct a Four Seasons hotel, a shopping arcade and luxury housing – has been suspended since 14 October, after a claim filed by the Basque company R&A Palace Gestión was accepted for processing.

The claimant denounced the alleged damage to the heritage of the seven buildings that comprise the complex, and which have different degrees of (historical) protection.

The Court in Madrid has taken the decision after the owner of OHL paid a pledge (aval) amounting to €163,000. Thanks to the legal decision, Villar Mir can resume the renovation work immediately.

The aval from the owner is significantly lower than the amount demanded by R&A Palace, which requested that it be equal to half of the total investment in the project, estimated at €500 million.

The Villar Mir complex had already been approved by the Town Hall of Madrid and the Community of Madrid after reductions were made to its buildable area. Following the agreement, Canalejas will house a 205-room hotel managed by Four Seasons, a retail space measuring 15,000 m2 managed by Grupo Villar Mir and around 22 luxury homes, which will be sold for c. €12,000/m2.

Original story: Expansión (by R.R.)

Translation: Carmel Drake

Reyal Urbis To Appeal Judge’s Latest Ruling

28 September 2015 – El Economista

Reyal Urbis is just one step away from liquidation after Commercial Court Nº 6 in Madrid dismissed the real estate company’s proposed agreement to exit from bankruptcy, which it filed for more than two years ago.

On Friday, the company announced that it will lodge an appeal against the ruling made by the judge Francisco Javier Vaquer and will request the suspension of the effects arising from it, until the appeal has been settled.

The previous intervention by the judge took place on 6 March, when he asked Reyal Urbis, which has bankruptcy debt amounting to €4,236 million, to remedy some of the errors identified in its proposal. Specifically, the judge demanded a “necessary and essential objective justification” of the proposed discounts and settlements.

The real estate company, led by Rafael Santamaría (pictured above), proposed two payment alternatives for its primary creditors. Under the first, the loans would have a discount of 90% and the remaining 10% would be paid through the transfer of assets in lieu of payment. The batches would be awarded to the entities by drawing lots, a process that Reyal confirmed was conducted in the presence of a notary on 10 February. The second option for these loans consists of applying discounts of between 88% and 93%, on the basis of the syndicated loan tranches, and then deferring the loan repayments for 6 years, with a further 4 years of interest-only payments.

The judge also asked that the “drag effect” be eliminated, since Reyal was planning to extend the effects of the agreement to any dissident creditors, if approval was obtained from 75% of them. According to sources close to the process, this would mean that creditors with joint mortgages would lose their privileged position, since the current law does not provide for this effect, and so it would only be possible if the creditors voluntarily relinquished their rights.

Insolvent until 2023

According to the bill that the Economista has had access to, these matters have not been remedied by the company. Moreover, the judge ruled that the restructuring proposed by the real estate company is “clearly detrimental to the rights of the creditors” and does not guarantee the viability of Reyal. Thus, the real estate company will record “negative equity until the end of 2023 for amounts exceeding €90 million, and the plan does not set out how to eliminate this cause of company dissolution from a situation of insolvency”.

Original story: El Economista (by Alba Brualla and Lourdes Miyar)

Translation: Carmel Drake