Tag: Glenn Maud

JP Morgan Negotiates €2bn Loan with Owner of Santander’s HQ

22 February 2018 – Voz Pópuli

There’s a new player in the complicated game of chess involving the bankruptcy and liquidation of the owner of Banco Santander’s headquarters, the Ciudad Financiera, in Madrid. One of the largest investment banks in the world, JP Morgan, is negotiating a €2 billion loan to unblock the bankruptcy proceedings, according to financial sources consulted by Vozpópuli. JP Morgan declined to comment about the rumours in the market. Market sources indicate that the loan has not been granted yet.

In this way, the US entity would support one of the shareholders, the company Edgeworth Capital, owned by the Iranian businessman Robert Tchenguiz. That banker is trying to get Marme Inversiones 2007, the company that owns the office complex, to emerge from bankruptcy without having to file for liquidation. To this end, it has asked Mercantile Court number 9 in Madrid to give it the green light to negotiate an early termination for payments with the creditors.

That is where JPMorgan comes in. Tchenguiz has managed to convince the entity to consider financing almost €2 billion, which would have to be used to repay all of the creditors, including several banks such as CaixaBank, ING, RBS and Santander itself, as well as funds such as GSO (owned by Blackstone), Canyon, Burlington, Värde Partners, Centerbridge and Monarch.

Many of these creditors, above all the funds that purchased debt at a discount, agree with Tchenguiz. But not the other shareholder, the British magnate Glenn Maud, who is preparing to make a rival offer, or Santander, which is leaning towards the proposal put forward by the Arab fund AGC.

Status of proceedings

After years of bankruptcy and hundreds of resources, the situation is closer than ever to being unblocked. In fact, the court has already given the green light to the liquidation plan for Marme Inversiones 2007. The problem is that two other parent companies, Delma and Ramblas, are still immersed in bankruptcy proceedings. A resolution is expected before the summer.

Unless there is a new legal war, all indications are that the financial situation of the owner of the Ciudad Financiera will be resolved this year.

Along with the proposal from Tchenguiz, the fund AGC and the consortium Madison-Maud-GCA are studying putting between €2.7 billion and €2.8 billion on the table for Santander’s headquarters, within the liquidation process.

Together with JPMorgan, Goldman Sachs is also positioning itself in this operation. It has been advising Santander for months on the solution that may be found to resolve the situation of its headquarters.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

The Owner of Santander’s HQ is Set to Emerge from Bankruptcy

26 January 2018 – Voz Pópuli

There is light at the end of the tunnel in the creditor bankruptcy of Marme Inversiones 2007, the company that owns Banco Santander’s Ciudad Financiera (in Madrid). This week, a key meeting was held to unblock the bankruptcy proceedings, with deliberation over several appeals, something that the courts will come to a decision about over the coming weeks.

The parties potentially interested in this process have started to take positions regarding the possible sale of the Ciudad Financiera, which could happen in the middle of this year. The best-positioned player is the fund AGC Equity Partners, with a proposal that values that bank’s headquarters at between €2.7 billion and €2.8 billion, as this newspaper revealed.

But two competitors have emerged: a consortium formed by Madison Capital, Glenn Maud and GCA; and a proposal from the Iranian-born financier, Robert Tchenguiz, according to financial sources consulted by Vozpópuli.

The offer that most concerns AGC is the one presented by the US funds (Madison and GCA) and the British property magnate Glenn Maud, who was one of the original buyers in 2008. The price that they may put on the table is close to the figure being offered by the Arab fund, around €2.7 billion.

Months of advantage

Nevertheless, AGC is the favourite in the race because it has been negotiating the operation with Santander for several months. Santander is not only the tenant in this case, it also holds a small part of the debt and a right of first refusal. Having said that, the Commercial Court number 9 of Madrid has denied that preferential right until now. Be that as it may, an agreement with Santander would facilitate everything.

Meanwhile, in addition to these two offers, further competition has emerged in the form of Tchenguiz, owner of the company Edgeworth Capital. The Iranian national has been trying to harness his investment in subordinated debt for years. By holding one of the riskiest tranches, he has to make sure that the liquidation plan protects him, otherwise, he will be exposed to discounts. That negative scenario would become a reality with AGC’s liquidation plan.

For this reason, Tchenguiz is offering an insolvency exit plan in which he would become the owner of the Ciudad Financiera by purchasing the stake owned by Glenn Maud.

To complete the picture, we should take into account that beyond the bankruptcy of Marme Inversiones, two other companies in Spain are involved in this insolvency: its two parent companies, Delma and Ramblas. And that those creditors and investors are awaiting trials in the UK and The Netherlands. This complex legal battle is starting to see the light at the end of the tunnel.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Santander Unblocks Sale Of Ciudad Financiera After AGC’s Mega-Offer

15 September 2017 – Voz Pópuli

The soap opera involving the sale of Santander’s Ciudad Financiera is closer than ever to being resolved. The Arab fund AGC Equity Partners, Santander and the majority of the creditors have reached an understanding to unblock the process, which has been stalled for three years, after the company that administers Santander’s global headquarters, Marme Inversiones 2007, filed for bankruptcy.

The key has been the size of the new offer presented in recent months by AGC, amounting to around €2,800 million, according to financial sources consulted by Vozpópuli. With this proposal, all of the creditors would receive the amounts due to them and there would even be some funds left over to share out amongst Marme’s original shareholders: the property magnate Glenn Maud and the fund Aabar Investments, controlled by IPIC, which owns Cepsa.

AGC has already informed the judge handling the bankruptcy – at Mercantile Court number 9 in Madrid – that the situation is now ready to be unblocked. But the magistrate has left everything hinging on the Provincial Court, which still has to resolve several prior appeals. Various sources consulted indicate that these resolutions could be resolved by the end of this year or the beginning of 2018. Then the formal auction of the company that owns the Ciudad Financiera could be launched, with AGC as the main favourite, assuming no last minute surprises.

Santander’s role

One of the keys behind sorting out the sale of the Ciudad Financiera is that Santander has withdrawn an appeal that threatened to perpetuate the bankruptcy process. In this way, the bank chaired by Ana Botín, advised by Clifford Chance, decided to submit a letter alleging that the Marme liquidation plan was not taking into accounts its right to sound out the market (for potential buyers).

In addition, Santander engaged Goldman Sachs to look for offers that would better fit with their interests. Paradoxically, the firm that is now best positioned to win – AGC – is the same one that blocked the bank’s appeal. According to legal sources, Santander pays an annual rent of around €110 million for the property and the rental contract runs until 2048, neither of which would vary under the new owner. But there are other clauses in the agreement that would be changed in favour of Santander.

The final stumbling block is the position of two of the players that invested in Marme Inversiones after it filed for bankruptcy: Aabar Investment, which purchased the shares of one of the original shareholders, the British businessman Derek Quinlan, and which would like to buy the Ciudad Financiera itself; and the Luxembourg company Edgeworth Capital, led by the controversial Iranian banker Robert Tchenguiz.

Sources close to the process think that it will be hard for their appeals to gain traction in the face of AGC’s willingness to repay all the creditors; something that no other investor has offered until now. The other recent offers amounted to between €2,400 million and €2,500 million.

Origin of the problem

Marme Inversiones 2007 filed for bankruptcy in 2014 after it was unable to pay its debts. The company was created in 2008 with very heavy financial burdens, at the worst time, shortly after the bankruptcy of Lehman Brothers. Marme paid €1,900 million for Santander’s headquarters in Boadilla del Monte.

Now the situation is just the opposite. The good times in the market mean that obtaining financing is cheaper than it has been for the last decade, something that AGC wants to take full advantage of to seal this complex operation.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake