Marina d’Or’s RE Company Reaches Agreement with Creditors to Emerge from Bankruptcy

12 April 2018 – El Economista

Marina D’Or has managed to convince the creditors of its real estate company, Comercializadora Mediterránea de Viviendas (Comervi), to give their approval to an agreement that will allow it to emerge from bankruptcy, which began in 2014 with a liability of around €600 million. In the case of the ordinary loans, two options are being offered: a discount of 65% and the payment of the balance in 10 years time; or the capitalisation of the debt into shares in the company.

The group led by Jesús Ger has already reached an agreement with Sareb and is going to negotiate another specific deal with the Tax Authorities.

The agreement must be ratified by the judge, a process that is expected to take between two and three months. On 6 May 2014, the Judge of Mercantile Court number 1 in Castellón accepted Comervi’s voluntary creditor bankruptcy, following the suspension of sales and of the construction plans for new apartments.

Thanks to this new agreement with its creditors, the firm “faces a future with positive prospects”, highlight sources at the entity.

Original story: El Economista (by Olivia Fontanillo)

Translation: Carmel Drake

Rayet’s Plan To Emerge From Bankruptcy

16 April 2015 – Expansión

The parent company of the real estate group, Rayet, has sold its 1.36% stake in Quabit, as part of its feasibility plan to emerge from the bankruptcy process, which now has the support of 71% of its creditors. Rayet filed for bankruptcy at the end of 2012 with debt of €600 million.

Original story: Expansión

Translation: Carmel Drake

Slim Negotiates A Deal With Hispania To Take Control Of Realia

6 March 2015 – Expansión

ALLIANCE / The businessman is building bridges with the Socimi, which has an agreement in place with the group’s creditors to restructure its debt. Slim may transfer some assets or engage the management of the real estate company to his rival.

The takeover war being fought between Hispania Real and Carlos Slim’s real estate company Carso, for the control of Realia may end with the waving of a white flag. On Wednesday, the Mexican businessman announced his acquisition of a 24.953% stake in Realia’s share capital from Bankia and “in addition” that he would be launching a takeover bid for 100% of the company’s shares at a price of €0.58/share.

The businessman’s offer exceeded the one made by the Socimi in November for €0.49 per share, by 18%. That takeover bid is still pending approval by the CNMV.

In his favour, Slim’s offer does not only win on price. The Mexican businessman is also the largest shareholder in FCC, which in turn owns a 36.9% stake in Realia. After Slim joined the construction group, FCC announced in February that it would be suspending the sale of its stake.

Agreement

Nevertheless, Hispania still has an ace up its sleeve. The Socimi created by Azora’s managers, Fernando Gumuzio and Concha Osácar made an agreement with Fortress, King Street and Goldman Sachs before launching the takeover bid. The three funds have lent €793 million of the total debt (€1,097 million) held by Realia. Those loans, sold by Sareb, Santander and CaixaBank last year, are due to mature soon: on 30 June 2016. Moreover, when the funds agreed to purchase the debt, they also agreed with Realia that, in the event of a change in more than 30% of the shareholders, then the whole debt amount would have to be repaid “immediately”.

On 21 November, Hispania made an agreement with the creditors in which the funds agreed not to exercise their shares and not to demand the full repayment of the financing that would result from the application of the change of control clause. In exchange, Hispania purchased 50% of the receivables that each one of the funds possessed, at a discount of 21%. This partnership makes Slim’s assault on the real estate company more difficult, and so the Mexican has not wasted any time building bridges with his competitor.

The main obstacle facing Slim is that Hispania and the funds agreed an exclusivity period of seven months for the execution of the agreements, extendable up to ten months if a competing offer were presented. “During that exclusivity period, neither of the parties may initiate, encourage, lead, trigger, conduct or respond to any offer, proposal, contact, conversation, negotiation or approximation of any kind, with or from any third party, regarding the implementation of any operation that may be similar or incompatible with the execution of transfer of the loans resulting from the financing to Hispania Real”, says the agreement. This means that Slim and the funds may not make any agreement until 21 September without taking Hispania into account.

Against this background, the Mexican businessman has chosen to forge an alliance with his rival, to reduce this period. In exchange, according to close sources, Slim is offering the Socimi some capital, some assets to increase its own equity or the opportunity to participate in Realia as its manager. Inmobiliaria Carso, the vehicle that Slim wants to use to acquire Realia, does not have either the structure or the knowledge of the Spanish market held by Hispania’s managers, and therefore a deal between the two cannot be ruled out.

Consideration

The prior agreement with Hispania places the creditor funds in an advantageous situation in the context of the new offer. In the event that the Socimi does decide to raise the price of its takeover bid, Fortress, King Street and Goldman Sachs would receive €38.25 million more for 50% of their debt. If, on the other hand, the Socimi decides to withdraw from the process, the funds shall pay Hispania €5 million “provided that the rights of creditors’ loans have satisfied the nominal”.

Original story: Expansión (by R. Ruiz, D. Badía and C. Morán)

Translation: Carmel Drake

Sareb Holds Board Meeting As Martinsa’s Deadline Looms

26 February 2015 – Cinco Días

Sareb held an ordinary Board meeting yesterday (as it does once a month) with the case of Martinsa Fadesa on the table. The creditor banks of the real estate company have until today, Thursday, to decide whether or not to approve the new proposed agreement presented by the company to avoid its liquidation. According to financial sources, the debt obligations that Sareb holds in Martinsa Fadesa amounted to €1,457.8 million as at June 2014. The (real estate company’s) second largest creditor is Caixabank with €907.9 million.

Martinsa Fadesa submitted a new proposed agreement to avoid its liquidation to its creditors on 30 December, since it is unable to make some of the payments stipulated in the previous agreement. Under the new proposal, the company highlighted that if it won its claim in the Supreme Court against Manuel Jove, the former chairman of Fadesa, against whom it had filed a multi-million euro lawsuit, then it would allocate the resources to pay its creditors.

Fernando Martín (pictured above) agreed the purchase of Fadesa from Manuel Jose between 2006 and 2007, in a transaction valued at €4,045 million. In 2008, Martinsa Fadesa filed for bankruptcy, the largest ever case in Spain, with debts of approximately €7,000 million. In 2011, the company reached a payment agreement with its creditors and so emerged from bankruptcy. That same year, the company decided, in its shareholders’ meeting, to file a social responsibility claim against Jove and the former CEO of the company, Antonio De la Morena, for €1,576 million. The former Chairman of Fadesa, who is now the Chairman of the Inveravante group, said then that the measure was “absolute nonsense”. The Commercial Court number 1 in La Coruña and the Provincial Court of La Coruña rejected the claim filed by Martinsa Fadesa, and so the company appealed to the Supreme Court. This month, the Supreme Court also rejected Fernando Martín’s claim.

The blow dealt by the Supreme Court to Martinsa Fadesa damages the real estate company’s prospects of avoiding liquidation even further. In addition, the Supreme Court ordered the company to pay all of the legal costs, which will require the immediate disbursement of several million euros (up to €60 million, according to legal sources).

Between January and September 2014, Martinsa generated turnover of €95.2 million, an increase of €24.5 million on the same period in the previous year, and it recorded losses of €201.6 million (vs. losses of €322.9 million during the first three quarters of 2012). In 2013, the group lost €652 million, and recorded negative equity of €4,288 million.

Like many other real estate companies, despite having a negative net equity balance, Martinsa avoided the requirement for dissolution under the Companies’ Act, thanks to Royal Decree Law 10/2008, which removes the requirement to account for impairments relating to real estate investments. Martinsa’s financial position is clearly very delicate and may be further compounded by the fact that the Government may decide not to renew the relevant regulation this year.

Representatives of the creditors met with the company last week and called for the departure of Fernando Martín as owner and shareholder, according to sources. Although liquidation may seem like the most logical course of action for the company, the same sources do not rule out the possibility of a last minute agreement being reached to avoid that measure.

Original story: Cinco Días (by Alberto Ortín Ramón)

Translation: Carmel Drake

Deadline For Martinsa: 26 Feb

15 January 2015 – Cinco Días

The creditors of Martinsa Fadesa have until 26 February to accept the new proposed payment agreement submitted by the company on 30 December. If they decide not to support it, the company will have to file for liquidation.

In a statement on Wednesday, the judge Pablo González-Carreró, from register number one in A Coruña, declared admissible the proposed modifications to the agreement presented by the company led by Fernando Martín. The period for accepting the terms will begin on 12 February and will end on 26 February, although any support committed from yesterday until the start of the general period will also be valid.

In the statement, the magistrate said that the company had breached the agreements reached previously, but that the third provision of the Royal Decree, dated 5 September 2014, entitles the company to request amendments to the agreement. According to the judge, the company is offering its financial creditors “the assignment of deeds relating to the assets that are not required for the continuation of the business’ activity and the conversion of the remainder of the debt into equity loans”. The proposal “is accompanied by a feasibility plan supported by certain rights and real estate assets that the company considers necessary to ensure the continuity of its business activity”.

The new proposal requires the approval of at least 75% of the ordinary creditors. During the last few weeks of 2014, Fernando Martín held negotiations with the main creditor banks to agree the terms of the new proposal, but he did not obtain strong support from those institutions.

Martinsa Fadesa had to submit a proposed agreement to the judge before 31 December to avoid going into liquidation, after failing to meet certain payment conditions for a second year in a row. The fact that it submitted the proposal on time meant the company avoided potential liquidation for the time being, but it now requires at least 75% of the creditors with ordinary loans to agree to the proposal and for it to be approved by the judge.

The real estate company filed for bankruptcy in mid-2008, with a debt of around €7,000 million. In 2011, it reached an agreement with its creditors to overcome the bankruptcy situation it had found itself in. Of Martinsa Fadesa’s total bankruptcy debt of €6,602.5 million, Sareb is the largest creditor with €1,457.8 million, followed by CaixaBank (€907.9 million) and Popular (€574.2 million).

Original story: Cinco Días (by Alberto Ortín Ramón)

Translation: Carmel Drake