Eroski to Sell Hypermarkets in Southern Spain

10 July 2019 – Richard D. K. Turner

The Basque chain Eroski is selling a series of hypermarkets due to an agreement with its creditor banks to refinance a debt of €1.542 billion. The markets are all located in southern Spain, whereas the bulk of Eroski’s operations are based in the northern part of the country: Galicia, the Basque Country, La Rioja, Catalonia and the Balearic Islands.

Given the hypermarkets’ geographical disparity, Eroski opted not to mandate a single advisor to complete the sale. Rather, it will work will a series of advisers to sell the individual assets.

Original Story: Idealista

Urbas’s Share Price Rallies Following the Publication of its 5-Year Strategic Plan

8 January 2019 – Idealista

Few events are as long-awaited by investors and analysts as the presentation of the strategic plan of a listed company. Above all, when that company has had a difficult year on the stock market, such as the case of Urbas. The real estate company, a classic amongst the ‘small cap’ or companies with a small market capitalisation in the Spanish market, is leading the first stock market rally of 2019 in the sector after losing almost 75% of its value in 2018.

During the first week of the year, Urbas’s share price has recorded a large rise of 30%. In reality, the reaction began during the final week of last year, when the group revealed the broad strokes of its strategy for the period 2019-2024. Its plan pivots around a reduction in the level of debt, generating value from its assets and the payment of a dividend from 2022.

The market has picked up on the company’s message, which with a land portfolio of almost 18 million m2, also wants to provide a new boost to its property developer business. But its number one objective is to reorganise its debt balance, which amounted to €194 million at the end of the third quarter, up by 3.7% compared to the same period a year earlier. The figure contrasts with the just over €16 million that the company is currently worth on the stock market.

The objective is to reduce the debt figure to €86 million. To achieve that, Urbas faces the challenge of moving forward with the dual negotiations that it is holding on the one hand with its creditor banks and on the other hand with Sareb to refinance its indebtedness to the necessary levels to allow it to handle new investments.

Therefore, the group’s plans are aggressive, as shown by the fact that Urbas wants to finish the first year of its new business plan with revenues of more than €20 million and a net profit of more than €14 million. By the end of the period, in 2024, the forecasts skyrocket. But, today, the reality of the group is very different. Until 30 September, Urbas lost €5 million due to the effect of the financial interest adjustment made and its revenues slightly exceeded €2 million.

In any case, the sharp rise in Urbas’s share price so far this year should be considered with the utmost caution. It is a very small security with very limited liquidity, which means that its movements may be brusque and fast, both up and down. In recent years, it has recorded large fluctuations. With the sole exception of 2017, the share price has always moved by at least 33% in each of the last nine years (…).

Original story: Idealista 

Translation: Carmel Drake

Asur’s Two Hotels Go Up for Auction for €70M

30 November 2017 – ABC

The judge of Mercantile Court number 2 in Sevilla, Pedro Márquez, has approved the liquidation plan for the company Ámbito Sur Hoteles (Asur), which includes the direct sale, by auction, of the two production units associated with the four-star hotels that the company owns in La Línea de la Concepción (Cádiz) and Isla Antilla (Huelva). Both are operated by the chain Ohtels. Asur, which also owns land in Manilva as well as 81 tourist apartments in La Línea, filed for liquidation after accumulating debt of €90 million, most of which corresponded to loans from Banco Popular (now Santander), Cajasur, Sabadell and Sareb (the so-called bad bank).

The Hotel Asur Campo de Gibraltar and its adjacent car park are worth €21 million, although the debt associated with that production unit amounts to €20.7 million, mostly loaned from Cajasur. Meanwhile, Hotel Asur Islantilla Suites & Spa has an asking price of €48.7 million and that is offset by loans amounting to €41.5 million, of which €38 million was initially granted by Banco Popular (now Santander). That hotel also houses a conference centre.

Although several creditor banks made a request for the mortgage debt over the hotels to be foreclosed, the judge from the Mercantile Court has ruled for them to be sold as separate production units, relegating the mortgage foreclosure to a subsequent time if the auction is abandoned (…).

The bankruptcy administrator, in the hands of the law firm Maio Martínez Escribano, will receive offers for the hotels and the two plots of land in Manilva until 16 December. If by then it has not received any offers for more than 75% of the real value of the estates, then the period for the submission of offers will be extended by one month, to 16 January.

If an offer is received for less than 75% of the real value of the hotels, the main creditors (Cajasur in the case of the hotel in Campo de Gibraltar and Santander in the case of the hotel in Islantilla) will have to approve the operation. The bankruptcy administrator will have the power to choose the most favourable offer without having to obtain legal authorisation for the sale.

In the event that the two hotels are not sold directly through this first auction, the sale will be undertaken through a specialist entity, such as a real estate consultancy firm, which will be granted a five-month period to that end. If that sales option also fails, a “dación en pago” of the properties will be carried out. Only in the event that the hotels cannot be sold in that way either will the properties be auctioned off individually and not as production units.

The history of Asur

The company Asur was created in 2010 by the Basque group Bruesa Construcción and the Nazarene real estate company Baremos Área Inversiones (…).

Original story: ABC (by M. J. Pereira)

Translation: Carmel Drake

Sacyr Wants To Clean Up Vallehermoso And Sell It Off Within 1 Year

11 September 2017 – El Confidencial

The appetite that international funds have unleashed for the Spanish real estate market has led Sacyr to redouble its negotiations with the creditor entities of its property developer subsidiary, Vallehermoso. The aim is to accelerate the settlement of that firm’s liabilities in order to sell off the last remains of the company, which is now just a shadow of what it used to be, but which is still a recognised brand in the market.

That is precisely the card that Sacyr wants to play: to take advantage of the appetite from the large overseas investors, to offer them a platform with extensive experience in the domestic property development market and which represents a household name for buyers. But, before reaching that point, it needs to complete the group’s financial clean-up.

The company chaired by Manuel Manrique acknowledges in its accounts for the first half of this year that “the negotiations with the creditor financial institutions progressed to decrease the debt significantly during the year”. Vallehermoso closed 2016 with financial commitments of €30 million, a similar figure to the previous year, but it managed to reduce its losses from €32.5 million to €7 million.

Sacyr is confident about its ability to pay off the liabilities of its subsidiary within one year and therefore be in a position to sell the company within the same time frame. Nevertheless, no formal sales mandate currently exists or is being organised, since all efforts are being focused on first achieving an agreement with the banks.

Vallehermoso’s current assets are worth €135 million, according to the latest appraisal performed by Gesvalt at the end of 2016. Of that amount, €129.9 million corresponds to land and €5.1 million to finished products and real estate investments. These figures are a far cry from the assets worth €7,000 million that the company held under its umbrella before the crisis, a giant that is already a distant memory and of which barely nothing remains after seven consecutive years of losses.

In fact, in February 2015, Sacyr was forced to come to the rescue of its subsidiary and inject €248.4 million to re-establish its equity balance, given that the property developer had closed the previous year on the verge of bankruptcy, with net assets amounting to less than half its share capital.

Nevertheless, since then, Vallehermoso has succeeded in convincing its creditor banks to accept discounts on the sales they are undertaking in order to accelerate the unblocking of finished assets, at the same time as sealing “daciones en pago” to also offload land, a strategy that Sacyr is confident of being able to redouble this year to finish cleaning up the company and getting it ready to sell (…).

A step-by-step liquidation 

In 2013 (…), the infrastructure group decided to deconsolidate its property developer subsidiary and account for it as an available-for-sale asset (…).

A year later, at the end of 2014, Sacyr transferred assets worth €1,000 million from Vallehermoso to Sareb in two consecutive operations, which meant the practical liquidation of the group (…).

Since then, Sacyr has held onto Vallehermoso as an available-for-sale asset. So far it has not managed to close the sale, but it is confident that it will be able to within the next few months, if the new round of conversations with its financial institutions yield the expected results.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

ECI Prepares To Sell Its 2 Stores In Parquesur (Madrid)

13 July 2017 – Voz Pópuli

El Corte Inglés is preparing to sell its stores in the Parquesur shopping centre, in Leganés (Madrid), according to financial sources consulted by this newspaper, under the framework of its asset sale policy to reduce debt. The group chaired by Dimas Gimeno occupies two spaces in Parquesur – which is owned by Unibail Rodamco – one for fashion and accessories, and the other for sports and leisure goods and the supermarket. El Corte Inglés assured this newspaper that no operations are currently active and that, in any case, it has remained as the tenant of other real estate assets despite divesting them.

According to real estate sources, the retail leader in Spain plans to sell various assets worth up to €150 million. Its portfolio of assets for sale includes not only the stores in Parquesur, but also others located in Burgos, Valencia and Madrid.

Leading this process is a stalwart of the Spanish company, Carlos Muñóz Gordobil, whom the sources consulted define as “a tough nut” and “old school operator”. The real estate sources argue that the prices that El Corte Inglés is asking for these buildings, which it considers to be non-essential, are too high.

The same sources indicate that El Corte Inglés’ real estate business is still weighed down by the purchase it agreed in 2014 to buy a plot on Paseo de la Castellana, adjacent to the centre that the group has in the area, which Adif sold through an auction. According to these sources, who are experts in the real estate sector, the figure paid by El Corte Inglés, €136 million, was “over the top”, as it exceeded the second highest offer submitted by more than €40 million. According to El Corte Inglés, the purpose of that purchase was to create its largest shopping centre in Spain, exceeding the one located in El Bercial (Getafe), which has a surface area of 180,000 m2.

In 2015, El Corte Inglés recorded profits of €158.13 million, up by 33.9% compared to the previous year and its turnover grew by 4.3%, to reach €15,219.84 million. Although the company has improved its revenues and has significantly decreased its debt, it still has to make some changes to facilitate negotiations with its creditor banks and secure better financing conditions, explained the financial sources consulted.

Four years ago, the retail group held debt amounting to €5,000 million, which put its business model in danger, and which essentially force it into a restructuring process in 2013. The sale of 10% of its capital to a sheik in Qatar, agreed in 2015, for €1,000 million; the sale of 51% of its financing arm to Santander in 2013; and the issue of promissory notes amounting to €300 million at the end of 2015, and of bonds through Hipercor, are just some of the measures taken by El Corte Inglés to reduce its debt to below €4,000 million.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

The Salazar Family Sells Hotel Velázquez For €63M

26 July 2016 – El Confidencial

Beset by debt, the Salazar family, the former owner of SOS-Cuétara, has spent the last three years trying to get rid of its vast hotel and real estate empire, an emporium whose last great jewel was the Gran Hotel Velázquez in Madrid, a property for which it has just received an irresistible offer.

Corporacion Hispano Hotelera, the company owned by the Salazar-Bello family, has reached an agreement with the Didra Group, famous for having constructed the luxurious residential areas of Montepríncipe and El Encinar, to sell the property for €63 million, according to several sources close to the deal.

The Ardid Villoslada family, which is behind Didra, has been linked to the property development business for decades and was made famous due to the marriage of one of its members, Rafael, to Mariola Martínez Borduí, the granddaughter of the dictator Francisco Franco. One of their sons, Jaime Ardid Martínez Bordiú has closed this agreement, with a view to opening a luxury 5-star hotel.

On 23 August 2016, Corporación Hispano Hotelera will present this sale for approval by the General Shareholders’ Meeting, with the aim of wrapping up the final sale in January, once the Salazar family has also received the blessing from its creditor banks, led by Banco Popular.

With its privileged location, in the heart of the neighbourhood of Salamanca, just a stone’s throw from the Retiro Park and the capital’s golden mile, the Gran Hotel Velázquez is a sought-after establishment. Nevertheless, it needs to be completely refurbished, according to experts in the sector.

In fact, Didra is expected to invest between €15 million and €20 million refurbishing the property. It plans to retain the image of a more bourgeois Madrid that characterises it, and always under the maxim of reserving the right to manage it, meaning that the Ardid family’s plans do not include opening a large hotel chain.

Didra maintains a close relationship with brands such as AC and NH, with which it operates some of the properties in its hotel group Nevertheless, the plans that the Ardid family have in mind for the Gran Hotel Velázquez more closely resemble the concept of the Hotel Palacio de Villapanés in Sevilla, a 5-star property located in the neighbourhood of Santa Cruz, in a former seventeenth century palace, which Didra manages itself.

With this sale, Corporación Hispano Hotelera will be reduced to an empty shell, after selling off the majority of its hotels in just over two years. The house of cards first started to topple in the Spring of 2014, when it had to close down Hotel Ada Palace, located on Gran Vía in Madrid, after it was evicted by the owner of the property, Real Gran Peña, which denounced the company for not paying the rent.

A year later, Hotusa purchased the Hotel María Elena, located 50m from Puerta del Sol, and renamed it the Eurostars Casa de la Lírica; meanwhile, Platinum Estates acquired the Hotel Asturias, in Plaza de Canalejas for €21.5 million. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake