Riu Hotels Wins a Small Victory Over Casanova in the Dispute Regarding Edificio España

1 March 2019 – El Español

A small victory (bringing the total to two) for Riu Hotels in the fight for ownership of the commercial space in Edificio España. The judge has dismissed the precautionary measures that the Baraka group, owned by the Murcian businessman Trinitario Casanova, requested to prevent the registration of the property in the name of the hotel group.

The magistrate has rejected the claim on the basis that there is no evidence, “in a clear and unequivocal way, of the relationship that must necessarily exist between what is claimed in the lawsuit and what is recorded in the Property Registry”. Specifically, Baraka requested that the inscription in the registry should include a note establishing the existence of a dispute over the ownership status.

The objective of that measure is to ensure that any possible investor in the commercial space knows that problems may arise in the future regarding the ownership. Nevertheless, the magistrate considers that the group owned by Trinitario Casanova has not proved its ownership of those spaces in the correct way.

Baraka is going to appeal

Specifically, and according to explanations provided by the group, there is a discrepancy between its lawyers and the judge because the lawsuit against the hotel firm was made directly by Baraka’s parent company, rather than by the company that the group used to purchase Edificio España (and which was subsequently transferred to its parent company ahead of the sale to Riu).

This is the second time that the courts have rejected Baraka’s requests, which in the opinion of Riu Hotels is good news. “We are continuing to work to open Hotel Riu Plaza España in the summer of 2019”, said the group in a statement to this newspaper.

The decision by the judge will be appealed by the Baraka group (…) and the Murcian group is convinced that it is in the right.

Original story: El Español (by Arturo Criado)

Translation: Carmel Drake

Centerbridge & Blackstone Join Forces to Bid for Santander’s Ciudad Financiera

13 September 2018 – Expansión

A consortium led by the US funds Blackstone and Centerbridge is emerging as the main favourite to buy Banco Santander’s headquarters in Boadilla del Monte (Madrid), in one of the largest real estate operations of the year in Spain, which is set to exceed €3 billion.

The court that is overseeing the creditors’ bankruptcy of Marme Inversiones, the company that has owned the so-called Ciudad Financiera Santander since 2008, has asked the parties interested in purchasing this asset to submit their binding offers by Monday 17 September at the latest. The objective of the bankruptcy administrator is to use the funds raised to repay Marme’s debt in full.

According to market sources, the funds GSO (a subsidiary of Blackstone specialising in restructured debt) and Centerbridge are preparing a joint offer that could amount to €3.1 billion. These investors are negotiating to finance their proposal with a loan that could be led by Deutsche Bank.

Second attempt

Both GSO and Centerbridge are now creditors of Marme, given that they purchased some of the debt from the banks that loaned money to the company back in the day. Their bid could be pitted against others from creditor funds such as Avenue Capital, according to sources close to the process.

During the creditors’ bankruptcy, which began in 2014, GSO and Centerbridge already tried to take control of the company, with a proposal to buy Marme’s share capital and retain the current debt. It was a similar strategy to the one pursued for several years by Aabar (an Abu Dhabi fund) together with the British-Iranian investor Robert Tchenguiz, after buying some of the debt granted to Marme by the bank RBS.

But the administrator has decided to conduct a formal auction so that the interested parties can bid together for the Ciudad Financiera and whereby allow all of the liabilities to be repaid. The creditors believe that offers above €3 billion will be necessary to recover all of the principal and interest.

Just as Blackstone and Centerbridge seem willing to formalise an offer in compliance with the conditions established by the judge, it is not clear whether Aabar is going to participate in the auction. In recent months, the fund has been caught up in a legal dispute with Tchenguiz regarding their joint investment in the company that currently owns the Boadilla campus.

The Kuwaiti fund AGC Equity Partners is also analysing the possibility of submitting an offer for the Ciudad Financiera. Almost two years ago, that firm submitted an offer for €2.7 billion to acquire the headquarters of the Spanish bank, but it did not get the go-ahead because the creditors’ bankruptcy was in an incipient phase and because Santander threatened to exercise its right of first refusal to buy back its offices.

Long-term rental

The investors Glenn Maud and Derek Quinlan, who already owned the Citi skyscraper in London, purchased the headquarters of the Spanish bank in 2008 for €1.9 billion, for which they used a loan from a group of banks led by RBS. Shortly after the acquisition, problems started with meeting the conditions of the loan, which ultimately led to the creditors’ bankruptcy of Marme Inversores, one of the instrumental companies created by Maud and Quinlan to carry out the transaction (…).

The main appeal of the Ciudad Financiera is the fact that the bank chaired by Ana Botín has committed to remain as the tenant for 40 years, until 2048. On that date, the Spanish entity may negotiate an extension to the lease contract or repurchase the property.

Three options

Once the offers have been presented next Monday before the Mercantile Court number 9 of Madrid, which is leading the bankruptcy, three possible alternatives may ensue.

If there are several attractive bids, the judge may open a process to competitively improve the prices proposed. If there is only one offer, of an appropriate value to pay the creditors, then it may be accepted immediately (…).

The last possibility is that the offers do not reach the estimated valuation. In that case, the judge may change the strategy and allow the piecemeal sale or liquidation of the different liabilities of Marme Inversiones (…).

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

SVP Global Buys Defaulted Mortgage Associated With In Tempo Skyscraper

7 November 2017 – Expansión

The investment fund SVP Global has reached an agreement with Sareb to buy the defaulted debt associated with the In Tempo skyscraper, the largest residential building in Benidorm. According to financial sources consulted, SVP Global has purchased a package of debt worth around €110 million, secured by the second tallest residential property in the EU, whose property developer, Olga Urbana, has filed for creditors’ bankruptcy.

It is one of the largest debt operations associated with a single real estate asset in Spain. SVP Global is a fund specialising in this type of operation and has around $6,900 million under management through its various vehicles. The In Tempo building is an unfinished project (although more than 90% of the construction work has been completed) measuring 192m tall and containing 47 floors for residential use.

The construction of In Tempo has given rise to a long-standing legal dispute. After launching the development of the tallest residential property in Europe in 2006, its property developer Olga Urbana had planned to finish the work in the middle of 2009. But, with the outbreak of the real estate crisis, the building work ended up being subjected to continuous delays and obstacles due to problems with the construction companies and suppliers. Although the construction work continued, in a fashion, under the control of Caixa Galicia, which financed the development with a €100 million loan, the financial crisis put an end to the construction work, which was never finished.

In 2012, the loan from the former savings back was transferred to Sareb, which at the end of 2014 and in the absence of an agreement between Olga Urbana’s shareholders, decided to enforce the creditors’ bankruptcy, with a total debt of €137 million. As part of that process, the judge approved the auction of the almost-finished building with a value of just over €90 million. Nevertheless, the offers were very low and so Sareb decided to exercise its preferential right to take ownership of the property.

Original story: Expansión (by C. Morán and A. C. Álvarez)

Translation: Carmel Drake