Tag: indemnity

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

Cerberus Wins Bid To Manage & Sell Bankia’s Expanded Real Estate Portfolio

5 March 2018 – La Información

Cerberus has fought off competition from Lindorff to become one of the new Bankia’s partners, responsible for managing and selling its portfolio of foreclosed assets, which now exceeds €5 billion. The group chaired by José Ignacio Goirigolzarri has opted to continue with its existing partner in the end, to the detriment of the partner that has been working with BMN since 2014, for reasons that may go beyond the mere economic bid offered by both, indicate reliable sources.

Bankia’s alliance with Cerberus dates back to 2013, when it acquired its real estate firm Habitat on which it built Haya Real Estate, the servicer, which is now finalising its debut on the stock market after having also been awarded contracts to manage the portfolios of BBVA, Liberbank, Cajamar and Sareb (…).

At that time, almost all of Spain’s financial institutions opted to divest their “servicers” in light of the need to accelerate the sale of their toxic assets and the large appetite of specialist funds to grow in size and contracts. BMN’s story is similar. In 2014, it sold its real estate asset company Inmare to Aktua for €40 million. Aktua was Banesto’s former real estate servicer company, which Lindorff acquired from Centerbridge Partners in a close battle with Apollo and Activum SG Capital Management in 2016.

The Norwegian fund, which is itself currently immersed in an integration process with Intrum Justitia, thus took over the management of the real estate assets of the banking group led by Caja Murcia, as well as of those transferred by BMN to Sareb. The entity now also works for Ibercaja and with certain portfolios from entities such as Santander.

Haya Real Estate and Lindorff’s contracts with their respective clients are similar because they both impose a decade-long period of exclusivity, forcing Bankia to review its position following the absorption of BMN, just like with other types of joint ventures. The bank is going to proceed first to break the contracts and indemnify each partner for a sum estimated to amount to €100 million, according to Expansión, and then it plans to close a new agreement with the winning party. Both partners may have submitted similar bids although it is understood that Aktua offered an exclusively commercial service whilst the agreement with Haya Real Estate included the absorption of the workforce.

The transfer of employees

The new Bankia Group’s property portfolio has a gross value of €5.1 billion, as at the end of 2017, compared with €3.5 billion registered a year earlier excluding BMN’s exposure. The entity has a cushion of provisions that covers 35.9% of its portfolio value in such a way that it could afford to dispose of the portfolio at 64.1% of its initial value without incurring losses. The bulk – 62% – are homes associated with foreclosed mortgages and another 16% are properties received for debt in construction or property development – 48% of that proportion corresponds to land -.

BFA’s subsidiary reduced its problematic assets by 9.9% YoY last year – excluding the incorporation of BMN’s exposure onto its balance sheet – thanks, above all, to sales amounting to €427 million (€5.55 million corresponded to gains) and a 15.3% reduction in doubtful risks.

With the integration of BMN, the bank is being forced to review and rethink all of the contracts where exclusive suppliers operate in both networks. It has already resolved one relating to life insurance, which will see it discontinue BMN’s relationship with Aviva – it will pay that firm €225 million by way of compensation – in favour of Mapfre, which was also victorious in 2016 when the bank came across another duplicate alliance, for the first time (with the same British insurance company, which was also a historical ally of Bancaja). It still needs to settle a similar agreement with Caser, and put the finishing touches to its deals with Lindorff and Cerberus.

Original story: La Información (by Eva Contreras)

Translation: Carmel Drake

Criteria Cuts Ties With Servihabit & Will Manage Its Own Properties

2 June 2017 – Expansión

Criteria Caixa has taken another step forward in the process to deconsolidate itself from CaixaBank. The holding company that owns stakes in subsidiaries of the La Caixa Banking Foundation (Fundación Bancaria La Caixa) has decided to internalise the management of its real estate assets, a function that until now have been performed by Servihabitat.

That servicer is owned in part (51%) by the US fund TPG and the remaining 49% stake is owned by CaixaBank. According to sources, Criteria will have to indemnify Servihabitat for the early termination of the contract with a payment amounting to €34.5 million.

The original agreement between the two companies was signed in 2014 and the contract still has six years left to run, given that it is due to terminate in 2023. The document included a clause to cover the possibility of an early termination in exchange for the payment of compensation, which has now been agreed by mutual agreement between the two parties.

The properties owned by Criteria account for around 7% of the total volume of the portfolio that Servihabitat has under management. The company also manages the properties foreclosed by CaixaBank, but its aim over the last few years has been to increase its client base by incorporating new portfolios onto its platform. The servicer took a giant leap when it was awarded the management of several portfolios by Sareb, comprising real estate assets from Novacaixagalicia, Liberbank and Banco de Valencia.

In 2016, the assets managed by Servihabitat increased by 4.8%, to reach 239,132 units, with a value of almost €50,000 million. The company recorded turnover of €285 million, up by 14.8%, thanks to the sale of homes worth €1,645 million, up by 11%.

Portfolio of €2,842 million

Criteria, which is chaired by Isidro Fainé, considers the decision to move to directly managing its own real estate assets, worth €2,842 million, to be strategic. Of the total amount €515 million – 18% of the total – are assets allocated for sale; €1,021 (36%) correspond to the land portfolio – noteworthy plots include those adjoining Port Aventura park –; and €728 million (26%) relate to rental properties. Finally, another €578 million (20%) constitute assets allocated to La Caixa Banking Foundation’s affordable housing programs.

Original story: Expansión (by S. Saborit)

Translation: Carmel Drake