Tag: financing agreement

Hispania Signs €340M Financing Agreement with BNP Paribas

26 September 2018 – Hosteltur

Hispania Activos Inmobiliarios has signed an agreement with BNP Paribas to open a financing line amounting to €340 million to finance and/or refinance its debt, according to a statement filed by the Socimi today with Spain’s National Securities and Markets Commission (CNMV).

In the relevant fact, the company reports that on 25 September 2018, it signed the aforementioned agreement with the entity “under market terms, amounting to €340,000,000, to finance and/or refinance debt held by the group’s entities upon their maturity, plus commissions, costs and expenses”.

This new financing arrangement will expire on 16 February 2020, although it may be extended twice by the company for one year each time.

Hispania recorded a net profit of €71.9 million during the first half of this year, 55% less than during the same period in 2017 when it earned €161.4 million. That decrease was basically due to the recognition of a provision for the fees to be paid to Azora, the former manager of the group. As Hosteltur reported, the relationship between the two entities was terminated on Monday, with Concha Osácar and Fernando Gumuzio, the owners of Azora, leaving the Board of Directors of the Socimi.

Blackstone, the new owner of Hispania, has paid €224 million to the manager by way of compensation for the early termination of Hispania’s asset management contract, which covered its hotels, offices and residential buildings. The indemnity amount was calculated on the basis of the manager’s base fees (€33.6 million) and success fees (€190.8 million), according to the terms specified in the “Termination Letter”, following the success of the takeover bid launched by the US fund for 100% of the Socimi.

Nevertheless, in terms of the results during the first half of the year, Hispania’s operating profit grew by almost 16%, to €57.1 million, whilst its revenues amounted to €85.3 million, which represents an increase of 9.8%.

Revenues from rental income amounted to €80.9 million, up by 14%. Of that amount, €67.9 million corresponded to hotels, €11.3 million to office buildings and €1.7 million to homes.

At the end of the first half of the year, the gross value of Hispania’s assets amounted to €2.818 billion, which represents an increase of 60.8% with respect to their acquisition price and of 43.3% compared to the total investment.

Original story: Hosteltur

Translation: Carmel Drake

Socimis Have Raised €1,700M In Funding In YTD16

11 August 2016 – Expansión

Merlin, Hispania, Grupo Lar and Axiare are increasing their capital and attending the bond market in order to finance new acquisitions, increase their asset portfolios and grow in size.

The large listed real estate investment companies (Socimis) – Merlin, Hispania, Lar España and Axiare – are preparing themselves to gain financial muscle and resume their property purchases. Specifically, so far this year, those Socimis have raised almost €1,700 million between capital increases, financing agreements and bond issues and they are expected to continue to pull on the real estate sector this year.

These four companies, which debuted on the Madrilenian stock exchange between March and July 2014 with €2,560 million to invest, have been the stars of the reactivation of the real estate sector and intend to continue to grow this year. Last year, the Socimis accounted for more than 40% of all real estate investment, with an investment volume of around €5,300 million. To that end, Merlin, Axiare, Hispania and Lar España managed to raise almost €3,000 million on the main market through several capital increases.

Bond issue

So far in 2016, the Socimis have again been very active in terms of raising funds for investment. Specifically, Merlin, which is preparing for its merger with Metrovacesa in a deal that will see it become the largest real estate company in Spain, has opted to go to the bond markets. The company chaired by Ismael Clemente completed a bond issue in April amounting to €850 million, with a maturity of seven years and an annual coupon of 2.225%, payable annual in arrears.

Similarly, in June, the Socimi announced that it had signed a revolving loan (a flexible arrangement) for a maximum amount of €320 million over five years, which will be used for the current investment program that it is undertaking, as well as to finance new acquisitions. (…).

Meanwhile, Hispania, which focuses on the hotel sector above all, completed a capital increase in June amounting to €231 million, through the issue and placing into circulation of 25.8 million new shares, at €8.95 per share (the sum of the nominal value and the issue premium). The company in which George Soros owns a stake, which had used up almost all of its investment capacity, has identified new opportunities worth €1,500 million. (…).

Another of the Socimis listed on the stock market that wants to gain financial muscle to make purchases is Lar España. That company has completed a €147 million capital increase this year, through the issue of 30 million shares at a price of €4.92, in order to be able to undertake new transactions.

In addition, in February, the company signed a loan with a banking syndicate comprising Natixis, Credit Agricole and Santander, amounting to €97 million over a seven year term. This financing was associated with the acquisition of Megapark Barakaldo. (…).

Financing agreements

In March, also with the aim of raising funds for investment, Axiare Patrimonio signed a new financing contract with Banco Santander for €14.9 million over two premises in Edificio Velázquez, in Madrid.

In addition, in June, Axiaire reached a financing agreement with Bankinter amounting to €31.2 million, with a five-year term. (…).

Similarly, the company has also signed an agreement with BBVA amounting to €7 million, also with a five-year term. In this case, the financed property is an office building on Calle Josefa Valcárcel (Madrid).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

The Fund Polygon Asks Slim To Raise His Bid For Realia

15 March 2016 – Expansión

The British fund Polygon is legally mobilising itself to try to obtain the maximum value from Realia. The fund, which controls an 8.53% stake in Realia through various financing vehicles, considers that the price of €0.80 per share that the Mexican tycoon Carlos Slim is offering in his takeover bid “is clearly a long way from a fair price”. The fund, which is headquartered in London, is demanding at least €1.78 per share, more than double the bid price. In letters to the National Securities Market Commission (CNMV) and the Board of the real estate company, Nicolas Dautigny, one of the Directors of European Investment at Polygon, says that the price of €0.80 per share that Slim is proposing, through Inmobiliaria Carso, “is not fair” and “significantly undervalues the company’s assets”.

The letters, to which Expansión has had access, copy in the law firm Araoz y Rueda Abogados, advisors to Polygon, and thereby begin the legal procedure to demand a higher price for the takeover.

In its letter to the Board of Realia, Polygon urges the governing body to engage an independent investment bank and to look for “alternative buyers” for the company “in order to maximise its value”. “Otherwise, Slim will take control of Realia without paying the fair price”, he adds.

Meanwhile, in its nine-page letter to the CNMV, the fund lists a number of arguments that, in its opinion, justify that the price of the takeover bid should be higher. The first is the net asset value (NAV) per share that the company itself assigns its assets. According to Polygon, the company has set a net asset value of €1.40 per share. That should be the starting point. Polygon says that the takeover bid should be higher than that price because “the value of the assets published by the company is too conservative compared with other companies in the sector in terms of the appreciation of its real estate assets in Spain in 2015”. Specifically, “if we apply the same increase that Colonial saw in its assets during 2015, i.e. 16%, then Realia has a NAV value of €1.78 per share”, explains Polygon.

Serious violation

Polygon warns the CNMV about the financing agreements between Slim and Realia, which are happening in parallel to the takeover, and says that it understands that “the Board’s duty of neutrality has been breached” by Realia, which may constitute a “serious violation” of the Securities Market Act, and it calls upon the CNMV to investigate this matter.

Original story: Expansión (by M. Á.Patiño)

Translation: Carmel Drake