Carlos Slim Rescues Koplowitz & FCC

27/11/2014 – El Mundo

Mexican tycoon Carlos Slim, one of the richest men in the world, has become the main shareholder of one of leading Spanish builders, Fomento de Construcciones y Contratas (FCC).

Controlled by the Koplowitz family for over six decades, the contractor reached an agreement with Slim on decreasing the holding percentage of Esther Koplowitz (pictured) from 50.01% to around 22.43%, while the Carso group of the Slims will receive a 25.63% stake. Spanish Stock Exchange Market Regulator CNMV informed the partners agreed on joint ownership of FCC without obligation of pursuing a takeover bid for the entire builder.

Slim is bound to pay over €650 million for the share, of which €500 million will be injected into FCC’s capital and the remaining amount will allow the investor to seize the pre-emptive rights of Koplowitz. The capital hike means a double victory for the businesswoman as she will be able to get out from her defaulting personal debt owed to Bankia and BBVA and to prevent her properties from being foreclosed.

The entrance of the Mexican magnate means contribution to only half of the foreseen €1 billion capital increase in FCC, thereby allowing other investors to join the hike.

On news on the agreement being at the verge of sealing, FCC’s stocks jumped up 3% and closed yeasterday at a price of €14.63 a share, meaning a total market value of nearly €1.95 billion.

Last Monday, the contractor announced it had broken negotiations with Soros and started dealing with the Carso group.

Carlos Slim will be the second prominent stakeholder in FCC as Microsoft founder Bill Gates already has a 5% share in the firm.


Original article: El Mundo (by Carlos Segovia)

Translation: AURA REE

Guggenheim May Join Soros in FCC Capital Hike

24/11/2014 – Expansion

The €1 billion capital hike approved by the shareholders of FCC brings another surprise. Investment fund Guggenheim Partners could join financial magnate George Soros who was bound to subscribe to all increase shares corresponding to Esther Koplowitz (pictured) and take a 25% stake in the contractor. The businesswoman will reduce her holding to a similar percentage as now she owns 50.02% through B-1998.

Final shareholding structure of Fomento de Construcciones y Contratas will depend on the result of negotiations between Soros and Koplowitz teams. Still, the due diligence (or asset valuation) process is pending accomplishment.

It is expected that the final price will be slashed by 25-30% and that may attract some new investors. For instance, Guggenheim could obtain a 5% share.

For the first time, George Soros rescued FCC in December 2013, when the businessman bought a 3% share in the group for €55 million (15 Euros a share).

The current operation is said to be worth €700 million, of which €500 million corresponds to new shares acquisition and the rest to the value of the pre-emptive right of B-1998.

Esther Koplowitz foresees spending the equity on amortization of the €1 billion debt owed to BBVA and Bankia, which the banks prolonged by another 5 years at an Euribor + 250 bps interest rate.

FCC will intend most of the capital hike funds for repayment of the B tranche valued at nearly €4.53 billion. Originally amounting to €1.35 billion, the part grew by another €1.39 billion in interests which step-by-step went on growing annually from 11% to the present 16%. The agreement also involves a 15% write-off on the part of banks.


Original article: Expansión (by B. Badía & C. Morán)

Translation: AURA REE

Fairmont Makes For Madrid’s Ritz As Marriott Withdraws From the Bidding

23/09/2014 – Expansion

A new bidder joined the auction of Hotel Ritz in Madrid. As Marriott backtracked on its €130 million bid for the one of the most beautiful hotel jewels in Spain, Fairmont barged in to compete for it. The property belongs to Omega Capital of Alicia Koplowitz and to Orient-Express, holding 50% of it each.

In 2003, the owners bought the establishment for €125 million from Le Meridien.

In May, the partners hired JLL (former Jones Lang LaSalle) to look for a new purchaser in the middle of fever caused by the arrival of Four Seasons to the capital. The high-end chain from Canada is going to open a hotel inside the Canalejas complex in 2017.

The move convinced many international chains to invest in Madrid. For instance, such brands as Mandarin Oriental, Hyatt, Marriott, Hilton or InterContinental are already eyeing the market. Therefore, the bidding for the Ritz establishment was expected to be more fierce.

Marriott outbid all the competitors with its €130 million offer ,however in the last moment the board of directors of the famous chain opted out. Purchase of the 137-room and 30-suite hotel also means a €40- to 50-million investment in its refurbishment.

Fairmont was officially founded in 1907 but its roots reach the year 1885. In 1999, the chain fell in hands of a hotel branch of Canadian Pacific Railway but its brand name was saved. In 2006, Fairmont joined Raffles and Swissôtel in a holding, called FRHI, managing 110 hotels in Europe and U.S.A. Four years later, Qatari Diar paid €847 million for a 40% stake at the holding and offered buying the share of Colony Capital.

The Qatari fund acquired Hotel Vela for €200 million and, at the beginning of this year, Hotel Renaissance for €78.5 million from Marriott, both properties found in Barcelona.

Hotel Ritz itself is a collateral for the loan that its owners borrowed from Eurohypo and which was included in the mega-NPL sale called the Octopus Project, finally sold to U.S. fund Lone Star.


Original article: Expansión (by Y. Blanco & J. Zuloaga)

Translation: AURA REE

Alicia Koplowitz Buys an Office Tower in Barcelona From Bankrupt Monteverde

11/07/2014 – Vozpopuli

The biggest opportunities on the Spanish real estate market are not only snapped up by vulture funds and foreign investorsAlicia Koplowitz, through her investment vehicle Omega Capital, has just bought an iconic office building in Barcelona known as Torre Tarragona, from now insolvent Grupo Inmobiliario Monteverde.

Monteverde carried out several transactions (e.g. it bought the old Barcelona headquarters of Banesto and three units located on Madrid´s Plaza de España Square purchased from Renta Corporación for €110 million) at the beginning of the last decade and could not redeem the expiring loans.

The situation pushed the real estate group towards bargain asset auctions, at once spotted by the market experts.

The 27.000 square meter property which rises 19 floors up was bought in 2006 by Grupo Inmobiliario Monteverde from a property managing branch of Credit Suisse for around 90 million euros.

In a desperate step to dodge the total bankruptcy when the recession hit, the company tried to sell the properties in Madrid, put together in the “Copernicus” portfolio, to Colonial. However, the operation have not materialized due to Colonial´s own solvency troubles.

The three buildings have fallen in hands of British funds, while the property in Barcelona was acquired by Inditex belonging to Amancio Ortega. Finally, the Torre Tarragona tower was purchased by Omega.


Original article: Vozpopuli (by Raul Pozo)

Translation: AURA REE

Soros Offers €1.5 Bn to the Koplowitz For Rescue of FCC & B-1998

26/06/2014 – El Confidencial

George Soros laid his cards on the table. To help Esther Koplowitz to avoid the implementation from the side of her lenders, the US magnate offers a €1.5 billion fresh capital injection in FCC and B-1998.

The capital enlargement for FCC will amount to €1.35 billion with refinancing tranche interest rate of between 11 and 16%. It is very high as it almost quadriples current differentials. The company is unable to pay them.

On the other hand, the equity that Soros is going to pump into B-1998, family office of the Koplowitz controlling 50.1% of FCC, will help the firm to face its €1 billion indebtness.

FCC stopped returning dividents without which Esther Koplowitz will not manage to meet requirements established by BBVA and Bankia (the main lenders).

The only drawback of Soros´s offer is the demand of a 40% discount on FCC´s shares value. Moreover, the investor wants a cut in debt from the creditors justified by the company´s being the FVC.

The proposal is so confrontational that at first both the family and the banks rejected it. However, the situation of the firm is too tough to give the talks up. If B-1998 does not find a new partner before July 31st, BBVA and Bankia will take control over the builder.


Original article: El Confidencial (by Agustín Marco)

Translation: AURA REE

Alicia Koplowitz & Orient-Express Seek Buyer For Hotel Ritz in Madrid

6/05/2014 – Expansion

The Hotel Ritz in Madrid returns to the market after a decade. Omega Capital, an investment firm chaired by Alicia Koplowitz, together with Orient-Express that is managing the establishment hired JLL (former Jones Lang LaSalle) to say goodbye to the property they acquired for €125 million from Le Méridien in 2003.

There are several solutions in talks: the hotel could be sold to a third party but managed by Orient-Express, or the luxury chain could waive operating the Ritz completely. The latter scenario would multiply the number of aspirants wanting to acquire the property. There is also a possibility that a fund would finance refurbishment of the building through more expensive mezzanine debt.

Noteworthy candidates that have already presented their proposal are, among others: Marriott, Hyatt, Hilton, InterContinental or Mandarin Oriental, all looking for an excellent location in Madrid´s center.

Moreover, sources with knowledge of the market suggest that perhaps Orient-Express could buy Omega´s stake in the hotel or vice versa.

The Four Seasons´s plans to open a hotel in the Canalejas complex in the capital in 2017 attracted attention of other world-wide known hotel giants.

When it comes to the hotel itself, at the end of 2012 its books showed a 6% cut in revenues (down to €23 million) and loss reduction by 76% to €3.3 million. That time the property had a mortgage to assure payment of €65 million in loans from Hypothekenbank. In 2013, its owners contributed with €6.38 million that jointly rise the shareholders´credit to €38 million.

The property yet does not dispose of all the town planning permissions from the City Council of Madrid. Investment in its renovation would consume between €40 and €50 million. After the remodelation, it will offer less rooms but more suites (currently it has got 137 of the first and 30 of the second type).



Original article: Expansión (by Yovanna Blanco)

Translation: AURA REE