FCC Wins Legal Ruling Against Blackstone & Goldman Sachs

1 December 2016 – Expansión

A judge from the Commercial Court in Barcelona has dismissed the lawsuit filed by GSO, one of the funds owned by Blackstone, and by Goldman Sachs against the legal agreement approved for the refinancing of FCC‘s debt. As a result of the agreement, the construction company had managed to refinance a tranche of its debt (€1,350 million) at a significant discount (but GSO and Goldmans opposed the deal).

Although the refinancing was backed by 93% of FCC’s creditors, Blackstone and Goldman Sachs opposed the operation and appealed to the courts for damages caused amounting to around €295 million. The judge has now rejected their claim, which cannot be appealed to a higher court.

In January 2015, the Commercial Court of Barcelona validated the judicial approval, which allowed the Spanish construction company to apply a discount and reduce the cost of a tranche of its corporate debt amounting to €1,350 million.

The law firm Linklaters advised FCC in the financial restructuring process and has defended the interests of the construction group against the lawsuit filed by the funds. Uría also acted on behalf of the banks (Bankia, BBVA and CaixaBank), who participated in the lawsuit as a party affected by the appeal, whilst a lawyer from Jones Day defended the interests of GSO and Goldman Sachs.

93% of the banking syndicate accepted the new financing conditions, which basically involved accepting a discount of 15% through the repayment of debt amounting to €900 million using €765 million raised during the company’s most recent capital increase. The outstanding loan balance, around €450 million, is being repaid at (an interest rate of) 5%.

The opposing creditors included overseas investment funds such as Blackstone (GSO) and credit institutions such as Burlington and Ice Focus. The foreign banks included Goldmans, Barclays, Credit Suisse and Merrill Lynch, amongst others. GSO and Goldmans ended up taking the case to court, but the judge has ruled against them.

The claimants tried to link the lawsuit in Barcelona with an appeal in London where another group of FCC creditors has filed a case for the early repayment of their investment through the issue of convertible bonds amounting to €450 million because they considered that the Spanish company had breached one of the suspensive clauses of the contract relating to the non-payment of debt (default). Blackstone (through GSO Capital) was one of the London-based claimants. Given the legal protected afforded to bondholders in London, FCC was obliged to suspend the process to convert bonds amounting to €32.75 million.

In the ruling in Spain, the judge in Barcelona rejected the existence of a link between the resolution regarding the early execution of the bonds and the validity of the restructuring of FCC’s debt.

Original story: Expansión (by C. Morán and G. Trindade)

Translation: Carmel Drake

Five Funds Buy Debt of the Landlord of Santander

9/07/2014 – Expansion

At least five opportunistic funds bid for the seat of the next landlord of Banco Santander. Värde Partners, GSO (a fund of Blackstone), Centerbridge, Canyon and Monar have purchased around one forth of the €1.9 billion debt of Propinvest, borrowed for buying the “Ciudad Financiera de Santander”, the bank´s headquarters in Boadilla del Monte (Madrid). The present landlord voluntarily filed for the insolvency process.

Its main lenders were Royal Bank of Scotland (RBS), as well as CaixaBank, Deutsche Postbank, ING, Bayerische Landesbank, HSH Nordbank and Raiffeisen which lent €1.575 billion. Some of them decided to leave before the arrangements and sold the debt to these funds.

According to sources with knowledge of the operation, the convention between Propinvest and the creditors might not be drawn before 2015. One of the solutions is the sale of the “Financial City”.

Santander holds a pre-emptive right in such case, therefore the bank may recover the ownership of the property with a discount. Also, a proposal by the lenders to swap the debt for assets, converting them into new landlords of Santander is not ruled out.

The entity pays at least a €82 million rent each year, as per the latest accounts facilitated by Marme Inversiones 2007, a Spanish arm of Propinvest. The “Ciudad Financiera” spreads over 160 hectares with Santander´s headquarters taking over 400.000 constructed square meters, including a hotel accommodation, an information center, a kindergarden, sports facilities and a golf course. The sale-and-leaseback agreement was signed in 2008 for the next 40 years.

Apart from the vulture funds, also Robert Tchenguiz and Abu Dhabi fund Aabar Investments take part in the bidding.


Original article: Expansión (by Jorge Zuloaga)

Translation: AURA REE