Judge Approves Liquidation Plan For Olga Urbana

15 December 2015 – Valencia Plaza

Commercial court number 1 in Alicante has approved the liquidation plan for the developer of the In Tempo building in Benidorm, the tallest residential skyscraper in Europe, construction of which began in 2006. Olga Urbana is the construction company behind this unfinished building, which has now been put up for sale. The company has filed for bankruptcy and Antonia Magdaleno has been appointed as the bankruptcy administrator.

The company that constructed the building filed for bankruptcy after its main creditor, Sareb, which inherited the loan originally granted by Caixa Galicia amounting to just over €100 million, requested legal intervention in the company. According to the court order, Sareb proposes that the direct sales phase last for at least five months.

In addition, if during the first three months of this phase, an offer is received to directly purchase the building for a price equivalent to at least 70% of its appraisal value, then Sareb asks that it be awarded to the bidder without waiting for the five month period to end. Nevertheless, the sale must involve the property in its entirety; offers will not be accepted for individual homes.

Original story: Valencia Plaza (by Estefanía Pastor)

Translation: Carmel Drake

Vulture Funds Bid For Martinsa’s Debt

4 March 2015 – Expansión

Some new players may be joining Martinsa Fadesa’s liquidation process. The decision taken by the real estate company’s Board of Directors on Monday to approve the liquidation plan has attracted investment funds in to the fold, interested in buying up some of its debt.

“The liquidation process appeals to investors that want to buy cheap and are willing to wait a long time (to recover their investments) and obtain a significant profit in return”, explains Mercadeuda, a company that specialises in connecting holders of debt with potential buyers.

However, the offers that Martinsa’s creditors will receive will be very aggressive. “I do not think they will offer to pay more than 10% of the nominal (value of the debt). In fact, the most reasonable offers will likely range be between 3% and 5%”, says Rubén Barriocanal, Investment Manager at Mercadeuda.

Martinsa Fadesa has assets worth €2,392 million and debt of almost €7,000 million, according to information filed with the CNMV. Of that liability, around €712 million is senior debt, according to the most recently presented bankruptcy report. More than €3,600 million comprises ordinary loans and around €1,750 million are equity loans.

The company’s principal creditors include Sareb, CaixaBank, Popular and Abanca. “The banks hold senior debt, and therefore they would not be particularly interested in selling. Instead, the offers from these investors, with high-risk profiles, are targeted at the holders of ordinary loans, such as suppliers.

For now, the movements between debt holders seem to be limited. “The only funds that are exchanging debt on the secondary market are minority and the amounts involved are modest. Some of them are the same players who bought stakes of less than €10 million three and a half years ago”, explain the financial sources.

The main brokers in this transactions include Bank of America and Citi.

Original story: Expansión (by R. Ruiz and D. Badía)

Translation: Carmel Drake