Tag: depreciation

Saba & Macquarie Compete For Spanish Car Parking Operator Empark

24 July 2017 – Reuters

Saba Aparcamientos and Macquarie have both submitted final offers for Spain’s Empark, valuing the car park operator at 900 million to 1.2 billion euros, sources close to the deal said.

Portuguese real estate group Silva & Silva is selling the 79% stake it owns in Empark, which operates 530,000 parking spaces is Spain, Portugal, Britain and Turkey, through holding companies Assip and Parkinvest.

Minority shareholder Haitong and Transport Infrastructure Investment Company (TIIC) could sell its 21% stake if satisfied with the price on offer, one source said.

But the minority shareholders have pre-emption rights and have agreed to sell these to Deutsche Asset Management if the offers are too low, the source added.

Saba, Macquarie and Deutsche Bank all declined to comment.

Last year, Empark recorded revenues of 201.3 million euros ($234 million) and earnings before interest, tax, depreciation and amortisation (EBITDA) of 71.4 million.

The company is funded with 385 million of corporate bonds maturing in 2019, including a 235 million fixed-rate tranche paying 6.75% and a 150 million floating-rate tranche paying 5.5% over three-month Euribor.

It also has 80.8 million euros of non-recourse debt across various project loans to finance 11 car parks that are not fully owned by Empark, where it holds stakes of 50% or more.

The company says its net debt amounts to 6.4 times its adjusted EBITDA.

JP Morgan and Caixa BI are advising the sellers.

Original story: Reuters

Translation: Carmel Drake

Spanish Hoteliers See No ST Threat From Brexit

3 August 2016 – Hotel News Now

Spanish hoteliers said they have yet to see any immediate negative impact on tourism from the U.K. since that country voted to leave the European Union.

“Spain has long been, and should remain for the foreseeable future, the favored vacation destination for British visitors despite Brexit, and all indications are that bookings well into next year are still healthy,” said Juan Molas, President of the Spanish Confederation of Hotels and Tourist Accommodations (CEHAT), during a 28 July news conference.

The U.K. is Spain’s largest source market for foreign visitors. Last year, 68 million foreign visitors traveled to Spain, which was an increase of 5% over the previous year. Approximately 16 million Britons accounted for 21% of those visitors.

Following the victory for the “leave” vote in the 23 June Brexit referendum and the resulting drop in the value of the pound against the euro, there was concern in the Spanish hotel sector that the subsequent higher prices would keep Britons away.

But hoteliers noted that British travelers traditionally reserve their holidays months in advance, so there appears to be no immediate negative impact on peak business this summer.

Molas said that momentum should extend into the 2016-2017 winter season and next summer. He added that Spain’s tour operators and travel agencies that sell package vacations—which are used by 70% of British tourists when booking their Spanish holidays—have noticed steady booking trends well into 2017.

“Spain continues to be the most popular vacation spot for the British, who don’t tend to travel for leisure to some of our competitors like Egypt or Turkey, which are more popular among the Germans and French,” he said. “Spanish hotels and destinations offer the British what they want on a holiday: safety and good value for money. We’ve seen the pound-euro exchange rate fluctuate often in the past, and there was no lasting major effect on us.”

But Molas cautioned the weaker pound could curtail daily spending by British visitors in Spain and London will now be a cheaper alternative for event booking than Spanish cities.

“London is our biggest competitor in Europe for the convention trade, and Paris, where hotel prices have fallen because of the recent unfortunate events in France, is also a rival,” he said. “But our biggest competitor in all of this would be for the British to decide not to travel and just stay home.”

Long-term effects of Brexit are still unknown, said CEHAT Secretary General Ramón Estalella.

“We don’t have a crystal ball to see into the future, but there are three important unknowns to consider,” he said. “One is when Britain will finally leave the EU and what further effects that might have. Two, no one knows where the pound will be in value (in) six months or there could be a crisis in Europe dragging down the value of the euro and so making the pound stronger. And three, what might happen in our competitor countries that could affect the British source market.”

The CEHAT executives also presented the findings of a survey of its members—which include 54 local and regional hotel associations and 1.5 million beds—on the sector’s performance through the end of the summer. A majority of the respondents are looking forward to a positive high season thanks largely to a rise in room rates and longer average stays by guests, which will result in higher profits.

Molas said hoteliers are confident that the continuing demand from both Spanish and foreign guests will increase.

“What’s important now is to use the occupancy rates to maximize earnings and promote Spain through advertising and marketing so we can cement its position as one of the leading tourism destinations in the world,” Molas said.

Original story: Hotel News Now (by Benjamin Jones)

Edited by: Carmel Drake

Wimpey Protects Its Homes In Spain From Brexit

28 July 2016 – Expansión

The British real estate company has refinanced its property developments on the coast through the issue of bonds amounting to €100 million.

One of the consequences of the UK referendum, held on 23 June in which Britons voted in favour of Brexit (to exit the European Union), may be a decrease in the volume of house purchases on the Spanish coast by citizens of the United Kingdom, as a result of the depreciation in the pound against the euro and fears about future restrictions over the free movement of people between the two countries.

Taylor Wimpey, the real estate company that has property developments in Andalucía, Alicante and the Baleric Islands, aimed mainly at British buyers, has decided to protect itself against those risks through a debt issue in euros to “hedge its investments in Spain”.

On 28 June, just five days after the referendum, the company completed a private placement of bonds amounting to €100 million with institutional investors, secured by its Spanish assets. The securities pay annual interest of 2.02% and are due to mature in June 2023.

According to market sources, this operation seeks to refinance in euros Taylor Wimpey’s debt associated with its assets in Spain, which amount to €168 million. By having the assets and debt of its Spanish subsidiary denominated in the same currency, the group’s balance sheet is more stable in the face of possible fluctuations in exchange rates in the future.

Currently, Taylor Wimpey has several property developments underway along the Spanish coast, where it has already committed to sell 399 homes.

During the first half of 2016, the firm completed the sale of 53 homes in Spain, at an average price of €342,000. Interestingly, one of these property buyers was Pete Redfern, the CEO of Taylor Wimpey. The chief executive of the group acquired two houses from the Spanish subsidiary, one for €278,000 and the other for €350,250. According to the company, the first home was sold at market price, whilst the other was purchased by Redfern taking advantage of the discount plan offered to employees “under the same terms offered to all other staff”.

Taylor Wimpey’s revenue in Spain between January and June amounted to GBP 14.8 million (€17.6 million), generating an operating profit of GBP 0.3 million. “We hope to continue making progress in the Spanish market during the rest of the year, given the strength of our order book” said the group. “Looking further ahead, we remain cautiously optimistic, given the potential implications of the macroeconomic environment in Europe”.

The company, which besides its business on the Spanish coast, is heavily focused on the United Kingdom, recorded revenues of GBP 1,457 million during H1 2016, up by 9.1%. At the results presentation yesterday, Redfern said that Brexit had not yet affected the group’s sales in the British market.

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

Reyal Urbis Appeals To Judge To Advance Its Payment Plan

27 March 2015 – Expansión

Negotiations / The real estate company, which has a debt of €4,000 million, has appealed against the judge’s request to change and clarify certain points of its proposed agreement.

The negotiations to enable Reyal Urbis to emerge from bankruptcy have taken an unexpected turn. The real estate company, chaired by its largest shareholder Rafael Santamaría, has decided to appeal against the request from the judge in charge of the bankruptcy process to modify various points of its proposed agreement.

The decision by the real estate company to postpone the changes requested by the judge has come as a surprise, given the very difficult situation it finds itself in. Reyal Urbis has debt amounting to €4,435 million, whilst its assets are valued at €1,345 million. Moreover, it has an equity deficit of more than €3,000 million.

In 2014, the company recorded a loss of more than €694 million. It has not made a profit for five years, due to the depreciation of its real estate assets and declining sales.

On 6 March 2015, the judge Franciso Javier Vaquer, head of the Commercial Court No. 6 in Madrid, asked the company to remedy deficiencies in the feasibility plan that it had presented a few days earlier. The proposal by Reyal Urbis included a discount of 90% for those creditors with mortgage guarantees from bilateral loans. In the case of creditors of syndicated loans, which included entities such as Santander, Sareb and Barclays, the real estate company proposes two options: one of them involves a discount of 90% and the payment of the balance using certain assets (Reyal reserved some of its portfolio, worth €260 million, for itself).

The second alternative is a discount of between 88% and 93% and a six year wait for the payment of the remainder, with a grace period of four years. In both cases, the discount to be applied “far exceeds the legal limits”, something which is not justified in the feasibility plan presented by Reyal Urbis, according to the judge.

Moreover, the judge also considers that in its business plan the real estate company does not explain how it is going to obtain the funds to pay the remainder of the debt.

These high discount rates would not apply to the Tax Authorities, another one of Reyal Urbis’s creditors, with a liability of €400 million, which the judge asks them to justify “if the bankrupt entity is willing to grant the AEAT (State Tax Administration Agency or Agencia Estatal de Administración Tributaria) unique, special or beneficial treatment that differs from that offered to other creditors of equal ranking (…), then Reyal should explain all of the details behind the unique, specific or preferential treatment or treat AEAT in the same way as it would treat creditors of similar loans with no option to refer to a subsequent agreement”.

The “Drag effect”

In its proposal, Reyal Urbis clings onto the bankruptcy reform law, approved last year, to obtain its exit from bankruptcy, even without the support of all of its creditors. “The company interprets that Article 121.4 of the Insolvency Act allows a vote in favour of the proposal by 75% of the creditors (by grouped liabilities) of the aforementioned syndicated loan to “drag” the remaining 25%”, they say at the company. This is something the judge rejects, since the waiver of the rights to receive (funds) should be made expressly.

The appeal raised against the judge’s request has surprised the financial creditors, which had expressed their willingness to accept significant discounts in exchange for holding onto the assets that were already provisionally awarded through the drawing of lots, and which featured as collateral in the refinancing agreements signed in previous years.

The main creditors believe that these changes requested are necessary, before they will consider submitting the possibility of accepting this plan or not to their respective boards of directors. If it fails to gain the support of the majority of the debt holders, Reyal Urbis will have to follow in the steps of its counterpart Martinsa Fadesa, which is in the middle of liquidation.

Nevertheless, the creditors have not completely given up on the process and believe that the appeal may afford Reyal extra time to present a proposal by consensus.

Original story: Expansión (by R. Ruiz and S. Arancibia)

Translation: Carmel Drake