Tag: Isolux

Torreal, KKR & ProA May Force La Caixa To Sell 100% Of Saba

10 November 2017 – Expansión

The European parking lot market is at boiling point. Following the sale of Empark earlier this year to the Australian fund Macquarie, now comes the turn of Saba, the other Spanish leader in the sector, controlled by Criteria (La Caixa). According to financial sources consulted, the firms KKR, Torreal and ProA, which together own 49% of the company, have resumed the plan to sell their shares. Unlike in previous processes, on this occasion, the conversations with investors revolve around the sale of 100% of the company, given that, by agreement between the shareholders, they may force La Caixa to sell its controlling 50.1% stake.

According to preliminary estimates, the valuation of the company could reach €1,150 million. Until last December, the company’s financial debt amounted to €545 million. Sources at Saba declined to comment on the news.

The parking lot group closed 2016 with turnover of €222 million, compared to €225 million in 2015, when its revenues still reflected income from its logistics parks. The company, a spin-off of Abertis, constituted in 2011, obtained an EBITDA of €103 million and earned €4 million from its ordinary activity in 2016 (€32 million with the gains from the sale of its logistics business to the Socimi Merlin).

Two hundred thousand parking spaces

The group manages 195,000 parking spaces across Spain, Chile, Portugal and Italy and employs 1,400 people. Its last major operation was the contract it won in 2014, with a bid amounting to €234 million, to manage the parking lots in Barcelona through a joint venture with the city’s Town Hall.

Potential buyers for Saba include the large investment funds that specialise in infrastructures. Sources in the market say that the investment firm Arcus, which manages a portfolio of assets worth €17,000 million, is looking at this opportunity. KKR, Saba’s third-largest shareholder, purchased the parking lots of the Dutch firm Q-Park earlier this year for almost €3,000 million. Meanwhile, Ardian and Predica also put the French market leader Indigo up for sale this year; that company has strong interests in Spain and is worth around €3,000 million.

There have been other smaller transactions in Spain, such as the agreement signed by Oak Hill to acquire Isolux’s best parking lots and the sale of Parkia to First State for €300 million.

Saba, which is chaired by Salvador Alemany, suffered a major setback this summer after losing the bid for Empark. The parking lot group, whose vocation since its constitution has been to make its debut on the stock market, had wanted to absorb Empark to acquire critical mass for its stock market debut. But its offer was lower than the one presented by the Australians, which, according to the market, bid around €900 million.

Following that setback, the minority shareholders have reactivated the sales plan. Specifically, the shareholders’ agreement lapses in November and the funds have a drag along clause to force the other shareholders to sell. The timeframe for looking for interested investors runs until May 2018 and if Criteria does not want to sell, then it has the right of first refusal to buy the shares that it does not control at the same price agreed with the investor (…).

Original story: Expansión (by C. Morán, I. Abril and M. Ponce de León)

Translation: Carmel Drake

Isolux Agrees To Sell Its Parking Lots To Oak Hill

5 June 2017 – Expansión

On Friday, Isolux took some important steps in its plan to reduce to the maximum the damage caused by its delicate corporate situation. On the one hand, the company’s Board of Directors, chaired by Nemesio Fernández-Cuesta, formulated the accounts for 2016, which saw it record losses of €1,332 million, after the entity recognised provisions and adjustments amounting to €2,853 million.

On the other hand, the company reached a preliminary agreement with the investment fund Oak Hill to transfer it the entire car park business. Sources at the company indicated that the investor held an option to execute a loan of up to €100 million granted in 2015. In theory, Oak Hill’s option was limited to, approximately, half of the business of Isolux Aparcamientos. However, the company and fund have reached an agreement for that option to be extended to include 100% of the subsidiary, in an operation that could see Isolux record revenues of €10 million and deconsolidate debt of €200 million.

The Spanish group first closed an agreement with the fund Oak Hill Capital Partners to jointly develop the business back in 2015. The investment fund undertook to inject €100 million into the company, in the form of a loan allocated entirely to expand the portfolio of assets. In exchange, Isolux granted Oak Hill an option to acquire a stake in the car park subsidiary from 2019 onwards.

Oak Hill’s arrival in 2015 ended a period of uncertainty for this branch of Isolux’s activity, which had been declared available for sale after other attempts to form strategic alliances had failed. At the beginning of 2013, the Spanish group signed a preliminary agreement with the French fund Edifice Capital to invest €150 million between 2013 and 2014. The resources were going to be used to purchase new car parks, with the aim of reaching 50,000 rotating spaces. However, in a surprise move, the French firm did not keep its word and withdrew from the project.

In the meantime, Isolux is pushing ahead with the rest of its divestments, the most high-profile of which is its exit from the transmission lines in Brazil.

On Friday Isolux approved the accounts for 2016, after postponing their formulation on four other occasions, and it did so to coincide with the new process that has been launched to restructure the group and avoid bankruptcy. “The Board of Directors considers that, with the right financial support, Isolux constitutes a viable business project,” said the Board of Directors of the company, which needs new funding and credit lines to ensure its survival.

Feasibility plan

Sources at the company indicate that the auditor, PwC, has not included any qualifications in its report, but that it has included paragraphs to emphasise the link between the operation of the company and the success of Álcarez & Marsal’s feasibility plan. This plan involves segregating the engineering business from the other LoBs and looking for a partner to inject money into the new company, with a portfolio of healthy contracts worth around €1,000 million. The solution requires the support of the plan’s current creditors/shareholders. The group is waiting for a response from Bankia and CaixaBank.

Original story: Expansión (by C. Morán)

Translation: Carmel Drake

Empark’s Owners Engage JP Morgan To Sell The Giant For €850M

19 May 2017 – Expansión

Empark is back on the market. The Portuguese controlling shareholders of the car park company have engaged JP Morgan to find a buyer for an entity worth around €850 million, on the basis of the prices and valuations of other similar transactions in the sector. Empark is the leading car park company in Spain with 500,000 parking spaces in the Iberian Peninsula, the United Kingdom and Turkey. The firm’s gross operating profit (EBITDA) amounts to €65 million and its debt, which the company has been restructuring over the last year, amounts to €475 million.

Following the most recent changes, Empark’s shareholder structure is still dominated by the Portuguese investors Silva & Silva, which own 78% of the company. The second largest shareholder is the Chinese conglomerate Haitong, with a 14% stake.

The company’s control vehicle is dominated by the founding families, who participate in the management of the group. The main executives of Empark are José Augusto Tavares, Pedro Mendes (Executive President) and Antonio Moura.

The last attempt to sell the company was made in 2015. Then, the company progressed to the stage of selecting a buyer, Vinci Park (Ardian), but the operation did not come to fruition. Vinci Park reported the breakdown in its negotiations to buy Empark in July of that year after finalising its due diligence work, which produced unsatisfactory findings. Ultimately, the company was concerned about Empark’s high exposure to town halls which, following the local elections held that year, were considering “re-municipalisation”.

Sources close to the fund Ardian say that they are not interested in the operation at the moment. The infrastructure investment giant put Indigo (formerly Vinci park) up for sale this year for around €3,000 million. The sale of Empark is quite complex, given that the shares of the car park company serve, in turn, to secure the shareholders’ personal loans.

According to sources close to the operation, the Portuguese shareholders have dragged the other shareholders into the sale and have been given until the beginning of October to find a buyer. They are keen to leverage the ‘drag along clause’ set out in the company’s shareholder agreements (which means that when a third party makes an offer to purchase the company by buying all of its share capital, then the shareholder that has the ‘drag along right’ may force the other shareholders to sell their stakes to the buyer).

Sources in the sector believe that if Pedro Mendes and his partners do not find an investor with a reasonable offer in time, Haitong may push ahead with the operation by itself or with one of Empark’s creditor banks. Deutsche Bank is one of the company’s latest lenders. The German bank manages the fund RREEF Infrastructure.

One of the possible candidates to analyse the purchase operation is the fund First State, which acquired España Parkia from the Nordic fund EQT and Mutua Madrileña in 2016 for just over €300 million. The US fund Alinda is also very active in Spain. It has made an offer to buy Isolux’s car park portfolio. Another candidate could be the Chinese firm Haitong

Original story: Expansión (by C. Morán)

Translation: Carmel Drake

Car Parks: Isolux Joins Forces With Oak Hill

28 January 2015 – Expansión

Cash inflow of €100 million / The group, which is in the middle of an IPO, has granted its new partner the option to buy its car park business from 2019.

Isolux has strengthened its car park subsidiary, one of the outstanding loose ends in its business, which will become more attractive through this transaction, as the company continues with its plans to go public in mid-February. Specifically, the Spanish group has signed an agreement with the fund Oak Hill Capital Partners to jointly develop the business.

The investment firm has injected €100 million into the company in the form of a loan, which is fully intended to increase the company’s portfolio of assets. In return, Isolux has granted Oak Hill an option to take ownership of the car park subsidiary from 2019.

The agreement transforms Isolux Infrastructure into one of the most active competitors in the Spanish parking sector. The car park business map has undergone a profound transformation in the last year, due to: the divestment processes that are underway (the sale of the market leader, Empark); the merger of companies (Mutua Madrileña and EQT have created a joint venture); and the award of large public concessions (Saba has acquired car parks from the Ayuntamiento de Barcelona, as well as some of those previously owned by Aena).

Currently, Isolux is one of the largest operators in the sector, with almost 24,000 parking spaces; it generated revenues of €14 million to September last year and a gross operating profit (EBITDA) of €8 million during the same period.

The agreement with Oak Hill, signed last year, ends a period of uncertainty for this branch of Isolux’s activity, which it had put up for sale after other attempts to form strategic alliances had fallen through. At the beginning of 2013, the Spanish group signed a preliminary agreement with the French fund Edifice Capital for the investment of €150 million between 2013 and 2014. The resources were going to be used to purchase new car parks with the aim of reaching 50,000 spaces in total. Surprisingly, the French firm did not keep to its word and withdrew from the project.

(….)

Original story: Expansión (by C. Morán)

Translation: Carmel Drake