19 April 2016 – Expansión
Uro Property, the Socimi that owns a quarter of Santander’s branch network on Spain, recorded profits of €67 million in 2015, down by 82% compared with 2014, after it sold some of the branches to Axa.
This operation, which saw Uro go from owning 1,136 branches of the bank chaired by Ana Botín, to 755 branches, generated net profits of €27 million for the Socimi. The transfer price for the 381 branches was €308 million. In addition, the company has another 40 branches up for sale after they were returned by Santander; BNP Real Estate has been appointed to coordinate the sale.
The second major milestone for Uro Property in 2015 was the refinancing of its debt and the cancelation of a swap (insurance against interest rates), which generated losses of €65 million in 2014. As a result, the Socimi reduced the financing costs on its €1,300 million debt balance from 6% to 3.35%.
Despite these achievements, Uro Property’s profit in 2015 was 82% lower than in 2014 as it incurred higher extraordinary revenues in the prior year. In this way, the valuation of its property portfolio generated profits of €183 million two years ago. In addition, the Socimi also recorded extraordinary revenues of €198 million due to the conversion of a mezzanine tranche (young or high risk debt) with a discount on its original value.
Uro Property saw an improvement in the valuation of its properties in 2015, up by 5%, from €1,804 million to €1,916 million, excluding the impact of the branches sold to Axa.
The Socimi will distribute €54 million of the €65 million profit as a dividend, equivalent to 80% of its profits, as required by the legislation that governs these companies. Of this amount, €18 million was already paid to shareholders in December and another €36 million will be distributed in July.
Meanwhile, Uro Property is being investigated by the Tax Authorities, which have started disciplinary proceedings. According to the company’s accounts, this investigation is due to “a transcription error”, for which the Treasury has proposed a fine of €7.29 million. Uro has appealed that decision and has not recognised any provisions in its accounts for the time being.
Uro is the company that used to be Samos, which acquired 1,152 Santander branches in 2007 under a sale & lease back arrangement. Its high level of debt meant that the creditor bank acquired some of its share capital in 2014.
Original story: Expansión (by J. Zuloaga)
Translation: Carmel Drake