Tag: debt refinancing

Insur Refinances €100 Million in Outstanding Debts

20 July 2019 – Richard D. K. Turner

Inmobiliaria del Sur (Insur) took advantage of favorable market conditions to refinance its outstanding debt this week. The firm refinanced 100 million euros of debt, equal to 60% of its total net liabilities, at significantly better conditions, freeing up over 35 million euros over the next five years. Insur owns rental properties, including offices, commercial premises and car parks.

Insur Patrimonial arranged the refinancing in an operation involving a total of 11 banks, led by Santander. Those banks include Caixabank, BBVA, Unicaja, Sabadell, Bankinter and Novo Banco. In addition to the €100 million, the firm also borrowed another €10 million to acquire an office building in Seville for redevelopment into a hotel to be leased to Hotusa.

Original Story: El Confidencial – Carlos Pizá de Silva

Photo: F. Ruso

Realia Refinances the €120M Debt Owed by its Property Development Arm

22 June 2018 – Eje Prime

Realia has today refinanced the debt owed by its property development arm, amounting to €120 million. The liability was due to mature on 30 June 2018, according to a statement filed by the real estate company, in which FCC and Carlos Slim hold stakes, with Spain’s National Securities and Exchange Commission (CNMV).

The new financing is due to mature on 31 December 2020. Realia has also indicated that “(the new financing) has been subscribed under competitive market conditions”. At the end of 2017, the company had gross bank debt amounting to €763 million, down by 10% compared to a year earlier.

Realia ended the year 2017 with a net profit of €30.5 million, 73.7% less than in 2016. The decrease was caused by the extraordinary results registered in 2016 due to discounts associated with another debt refinancing.

Original story: Eje Prime 

Translation: Carmel Drake

Iberostar Refinances Its Debt & Releases Guarantees

11 December 2015 – Expansión

New financing conditions / The hotel group owned by the Fluxà family is restructuring its debt and postponing its repayments until 2021. Its profits remained stable in 2014.

Iberostar is refinancing its debt for the second time in less than three years. In April this year, the hotel group controlled by the Fluxà family restructured the majority of its financial liabilities, according to the 2014 annual accounts of the parent company, Iberostar Hoteles and Apartamentos, filed with the Mercantile Registry. At the end of last year, the group’s short and long-term debt amounted to more than €400 million – most of which was held with financial institutions – and the liabilities between the group’s companies amounted to €533 million.

The agreement establishes a new timetable, which runs until 2021 – three extra years – and reduces the guarantees provided by Iberostar. Under the previous refinancing agreement, completed in 2012 and amounting to €768 million, the hotel chain offered a personal guarantee against the obligations of a €285 million loan, as well as mortgage guarantees over Spanish assets and the pledge of its 5% stake in ACS.

Percentage in ACS

The Fluxà family is the shareholder of the construction group that has been chaired by Florentino Pérez since 2006, when Iberstar sold its tourism division to Carlyle and Vista Capital for around €900 million to focus on the hotel sector. The private equity companies created Orizonia – which no longer exists as it filed for bankruptcy in April 2013 – and the Fluxà family invested almost all of the resources obtained on the purchase of ACS.

Iberostar paid €46.82 for each share – €826 million in total. Yesterday, ACS closed trading with a share price of €28.49, representing an increase of 2.76% during the session. In 2012, Iberostar was forced to recognise an impairment on its shareholding amounting to €147.12 million, which meant that the company recorded losses that year. At the end of 2014, the company recognised its shareholding in ACS at €36.41 per share and set its recoverable value at €40 per share. Despite this difference, Iberostar has not reversed the impairment recorded in previous years.

Iberostar is represented on the board of ACS by Sabina Fluxà, the Executive Co-Vice-President and CEO of the hotel chain, and it received dividends amounting to €20.34 million on its shareholding.

In 2014, the parent company’s turnover amounted to €43.47 million, down by 6.36%. The operating result decreased by 76.4% to €7.97 million, due to a reduction in other operating income and an impairment for the transfer of tangible assets and financial instruments. Iberostar expects to improve that figure this year, by maintaining stable turnover and cutting down its expenses. Nevertheless, the net result remained stable – at around €15.7 million – due to the positive effect of the lower tax charge on its profits.

As a whole, Iberostar and its subsidiaries invoiced €1,435 million in 2014, up by 29.6%, to place it in fourth position by turnover, surpassed only by Grupo Barceló – which also includes its tourism business – , RUI and Meliá.

Dividends

In 2014, the parent company allocated its profits to offset its negative results from previous years, but it distributed €55.7 million in dividends distributed against reserves. Moreover, it repaid debt amounting to €18.78 million owing to the Tax Authorities for Corporation Tax for the years 2007 and 2008.

Meanwhile, Iberostar has the option to purchase an additional 29.15% stake in Royal Cupido, in which it already holds a 29.5% shareholding, for €44.54 million. Pontegadea, the investment arm of Amancio Ortega, controls 45.5% of Royal, which owns five hotels in Spain and earned €3.43 million in 2014.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Santander’s Landlord Finalises The Sale Of 400 Branches

5 March 2015 – El Confidencial

Uro Property, the name given to the company formerly known as Samos, will begin trading on the MAB (‘Mercado Alternativo Bursátil’ or Alternative Investment Market) with the minimum legal amount, given that its ultimate aim is to move onto the main stock market.

Another one of the Socimi giants is counting down the hours until its goes public. Uro Property, the name give to the company formerly known as Samos, and the company through which several investment funds advised by Oleguer Pujol purchased a one third stake in Santander’s branches, will list on the MAB within the next few days and will continue to put the pieces in place to fulfil its aim of listing on the main stock market, with a healthier financial structure.

With this challenge in mind, the company chaired by Carlos Martínez Campos and led by Simon Blaxland is finalising the sale of 400 of the 1,316 branches that it owns, a transaction that it is already negotiating with an institutional investor and that will allow it to repay some of its €1,424 million loans ahead of time. This debt was already financed last year, when Samos’s creditor entities, led by Santander and CaixaBank, took control of the company, by capitalising €424 million of mezzanine debt and creating Uro.

This transaction turned Santander into the main shareholder of the Socimi, with a 24% stake, whilst CaixaBank took ownership of 14.89%; BNP Paribas holds a 8.81% stake and Société Générale holds 3.14%. In addition, several hedge funds and other entities, including Barclays and Bayerische Landesbank were left with stakes of less than 1%; whilst the former shareholders, Sun Capital, now known as Atisha Holding and the Pearl Group, now Phoenix Life, hold 21.7% and 14.38%, respectively.

All of the shareholders have committed to retaining their stakes for a minimum period of 12 months, during which time Uro Property is confident that it will close a new financing deal that will allow it to reduce its spread from its current level of 300 basis points to closer to 200 basis points.

In fact, the listing on MAB is seen as another step in this process, given that by law, all of the Socimis are obliged to go public within a period of two years. Although Uro Property’s deadline in this sense does not expire until after 2015, it has chosen to go public as soon as possible precisely because it believes that its status as a listed company will facilitate its refinancing.

This explains why Santander’s landlord is going to limit its initial placement to the minimum established by law: two million euros, a paltry figure, considering that its assets have been valued by CB Richard Ellis to amount to €2,000 million and given that forecasts suggest its market value amounts to around €500 million.

An independent audit to separate the company from Pujol

Renta 4 has been hired as the liquidity provider, whilst EY has performed the valuation of the company ahead of the placement. Aware that all eyes are focused on it, given its historical ties with Oleguer Pujol, the company commissioned Deloitte to conduct an independent audit (the auditor of the Socimi’s accounts is PwC), which certified that the maximum investment made in the Socimi by the son of the former President of Cataluña amounted to €67,000.

The Socimi has signed a new lease agreement with Santander, which has committed to occupy the properties for a minimum period of 25 years, and it may extend that period by 14 more years for a third of the assets, which the bank, chaired by Ana Botín, has identified as more strategic for its business. In return, the company has been granted the right to review the portfolio each year, as well as the ability to exchange some branches for others, provided these exchanges do not represent more than 1% per year, under any circumstances.

Santander will pay Uro rent amounting to €125 million net, since the bank itself will bear all of the costs relating to the properties. This guaranteed income, together with the refinancing deal signed last year, allowed the Socimi to generate profits in 2014. Moreover, with the new financial structure that it is negotiating, which it is hoped will extend the current six year maturity period, the Socimi is confident that it will significantly improve its results; this is key for a vehicle such as this, whose main attraction is the fact that it is obliged to distribute the majority of its profits in the form of dividends.

Uro will be able to begin working on its plans to list on the main stock market and expand its portfolio of assets from 2016, in line with the steps being taken by its competitors, such as Merlin, which acquired BBVA’s offices.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

The Banks Reject Martinsa’s Plan And Plunge It Into Liquidation

27 February 2015 – Expansión

The real estate company owned by Fernando Martín has liabilities amounting to €6,600 million.

In 2008, the real estate company Martinsa filed for the largest bankruptcy in Spain’s history.

On Thursday, the creditor banks put a final end to the adventure that Fernando Martín first began back in 2006. Then, the property developer from Valladolid, who appeared in the Forbes list of the richest men in the world, was evaluating the purchase of the Galician company Fadesa, a real estate giant with assets valued at more than €13,000 million located in 13 countries.

The financial institutions plunged Martinsa Fadesa into liquidation, by definitively rejecting the proposed agreement that Martín submitted to Commercial Court number 1 in A Coruña on 30 December, as they considered it to be “unacceptable”, according to comments from various creditor banks. The company has liabilities of €6,600 million, of which €5,500 million relate to financial debt.

In 2008, Martinsa Fadesa filed for Spain’s largest ever creditor bankruptcy, with a debt that amounted to €7,800 million at the time. Although the company reached an agreement to exit from that judicial process, it admitted last year that it was incapable of meeting the obligations of the (revised) agreement for the second year in a row, and it warned of an equity imbalance of €4,473 million. All of that led directly to its liquidation. Following the reform of the bankruptcy laws, Martín presented successive proposals, baptised with the name Aurora Plan, to the creditor banks, to renegotiate the debt. The bank rejected them time and again.

The latest plan, which was presented to the court unilaterally, proposed a 70% reduction to the debt balance and the liquidation of some of the liabilities through deeds in lieu. As a sweetener, Martín included the share of the capital that he thought he would obtain from a potentially favourable sentence in the lawsuit that he had brought against the former owner of Fadesa, Manuel Jove. He filed a claim for €1,576 million against him, on the basis that the sale had gone ahead despite certain irregularities. Martín’s plan involved slimming down the property developer to leave it with a structure of €883 million in assets and €489 million in liabilities.

Financial sources agree that they never accepted any of these conditions: they thought that the discount was excessive, that the assets held overseas were overvalued by 417% and that Martín was going to retain ownership of the best plots of land and properties in the portfolio. In the end, the Supreme Court ruled in favour of Jove and ordered Martín to pay the legal costs, which had risen at least €60 million, an amount the company simply cannot afford to pay.

The negotiations with the banks were led by a group of four banks, comprising Sareb – the bad bank – CaixaBank, Banco Popular and Abanca, which held almost 60% of the financial debt. The entities – altogether the company owes money to around twenty – decided to take control of the real estate company, just like they did with Metrovacesa and Colonial, respectively. Industry sources explained that most of the entities had already made provisions against their loans to Martinsa Fadesa, which filed for bankruptcy in 2008. However Sareb has not, since it acquired the toxic loans from nationalised banks at substantial discounts.

The real estate company, which employs around 70 people, does not have any developments underway. Therefore, in the end, the banks preferred to let the company fail, and for the judge to set in motion the process of orderly liquidation, whereby subjecting the company’s assets to a strict valuation.

Original story: Expansión (by Lluís Pellicer)

Translation: Carmel Drake

Martinsa Has Until Thursday To Convince Its Lender Banks

23 February 2015 – Expansión

Deadline for negotiations / The real estate company has debts of €3,500 million and must reach an agreement with its creditors to avoid liquidation.

Martinsa Fadesa has until Thursday 26 February for its banks to accept the new creditors’ agreement that the real estate company submitted to the judge to deal with its €3,500 million debt and whereby avoid the liquidation of the company.

One of the discrepancies between Martinsa and its creditors is a mismatch of up to 70% in the valuations of its assets. For this reason, entities such as Popular, Caixabank, Abanca and Sareb will not be joining the agreement.

Two weeks ago, the Supreme Court rejected a claim for €1,500 million that the company had filed against the former managers of Fadesa and in doing so further compromised the feasibility of the real estate company controlled and chaired by Fernando Martín.

Moreover, the High Court ordered Martinsa to pay the legal costs (of that trial), which according to financial sources, amounted to €50 million, somewhat higher than the amount for which the company, which lacks liquidity, had make provisions.

On 30 December, Martinsa Fadesa submitted a request to the Commercial Court of La Coruña to reform the creditors agreement that in March 2011 enabled it to avoid the largest bankruptcy in Spanish corporate history. The real estate company has requested a modification to the agreement on the basis that it is impossible for it to meet the debt payment calendar established.

Original story: Expansión

Translation: Carmel Drake