Tag: Martinsa Fadesa

Martinsa Fadesa Offers Banks 70% Of The Company

23/12/2014 – Cinco Días

Martinsa Fadesa has offered its creditor banks to swap much of the €3.5-billion debt, currently guaranteed by stock of the real estate company; thus, financial institutions would come to control a 70% stake in the company.

The remaining 30% of the realtor’s equity would remain in the hands of its president and current top stockholder, Fernando Martín, and his partner, Antonio Martín, according to sources from the company cited by Europa Press.

The debt-equity swap would be a major proposal of the plan that Martinsa Fadesa has revealed this Monday to its fourteen bank creditors in order to obtain debt refinancing before December 31st and avoid liquidation.

The real estate firm, which overcame the biggest insolvency proceeding in history back in 2011, offers its lenders to swap another 34% of the debt with a transfer of real estate assets.

According to a source of Europe Press from Martinsa, the banks have required further details on some of the terms of the proposal. The realtor expects to provide those details tomorrow, on Tuesday, in order to continue negotiating in its quest for an agreement.

Original article: Cinco Días

Translation: Aura REE

Martinsa And Reyal Face Liquidation With €7.5 Billion In Debt

22/12/2014 – Expansión

FUTURE / These two real estate companies are on the brink of extinction as they have not yet reached an agreement with their creditors to restructure their balance sheets. In January, the extension of the legal provision allowing them to not record their assets’ losses in value will end.

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Once giants in the Spanish economy and now on the brink of disappearing — this is the bitter road that Martinsa Fadesa and Reyal Urbis have been on over the last eight years. The future does not look so bright for the two largest real estate companies of the last decade, as they have not yet reached an agreement with their banks to clean up their accounts.

The two real estate companies’ financial debt totals at more than €7.5 billion; liabilities that stem from the financing obtained throughout the real estate bubble and that the companies have been bearing over the last couple of years in their balance sheets.

The most extreme case is that of Reyal Urbis. The real estate company filed for bankruptcy in February 2013 and has not yet reached an agreement concerning its financial situation. With a debt of €3.978 billion, according to the bankruptcy report, in addition to a net worth gap of €2.878 billion, Rafael Santamaría’s company only has assets worth €1.474 billion. After four refinancing attempts, the banks have chosen to agree with the realtor to sell off some of its assets in order to obtain liquidity. Without these properties, which used to generate the little income it has now, Reyal Urbis looks headed towards an orderly liquidation process.

No agreement

Although it seems as though Reyal’s future will be decided next year, Martinsa Fadesa’s future will be known shortly. The realtor has been negotiating new payment conditions with its creditor bank for the past eight months, after failing to cope with the first debt reimbursement in December 2013 that was set forth in the agreement resulting from the bankruptcy proceedings in 2011.

The real estate company, which owes €3.5 billion to its banks in addition to the liabilities of commercial creditors and the tax agency, only sees one viable option: to receive relief on 80% of its debt and pay off the rest with its assets or shares, especially those of its foreign subsidiaries. The bank would accept a significant debt relief in exchange for Fernando Martin, president and leading shareholder of the group, ceding some degree of control over the management of the company.

These entities, which are awaiting a new proposal from Fernando Martín, firmly rejected the company’s last request for refinancing on favorable conditions. Since there is no agreement as of yet, the creditors are already preparing for liquidation of the company.

Another real estate company that finds itself in trouble is Nozar. In the case of the Nozaleda family’s real estate company, which filed for bankruptcy in 2009, the financial institutions are in opposition and have not yet come to an agreement. While Iberia Investments Limited, Hypothekenbank Frankfurt, Sabadell and Bankia have backed a proposal which includes a debt relief of up to 50%; BBVA, Santander, Popular and CaixaBank have opposed it. The bankruptcy trustees do not support this plan either.

After having approved the agreement in September, the judge must respond to the appeal. In this case, an agreement between the creditors and the Nozaleda family does not seem possible, thereby placing the final decision in the hands of judicial authorities.

Negotiations between these three real estate companies and their creditors took place just a few weeks prior to expiry of the extension of the Royal Decree-Act 10/2008, which allows companies to avoid dissolving due to the losses generated by depreciation of assets. In the last extension, granted earlier this year, Spanish Government officials warned that this was the last time the law could be extended and called on troubled companies to sort out their situation within 12 months. Now, even amongst industry insiders, it is understood that a further extension would be meaningless, having had six years to solve their financial problems. Without further extension, Reyal Urbis and Martinsa Fadesa will file for liquidation, so the next days seem vital for their future.

Original article: Expansión (by Rocío Ruiz)

No Agreement Between Martinsa & Lenders, Liquidation Looms

18/12/2014 – Expansion

Talks between Martinsa Fadesa and its creditors are finishing with quite bad prospects for the real estate company. According to sources with knowledge of the negotiations, uncompromising position of the firm’s chairman is hindering the agreement.

Before December 31, Martinsa must pay-off 23% of its financial debt, currently amounting to 3.5 billion euros. If not defrayed, the company will inevitably be dissolved.

Since the very first moment, the group of creditors led by main lenders Sareb, Popular and CaixaBank were in favor of negotiations and even an 80% forgiveness.

However, in exchange, the entites asked for shares in management of the company and debt-for-equity swaps, opening them the door to Martinsa’s capital.

Fernando Martin (pictured) has rejected the move and moreover, he is claiming a new credit line assuming much more attractive conditions than those ruling the market (at a 1% interest rate). The fresh capital injection would serve to repay 700 million debt to the creditors and the Treasury.

Facing such a set of terms and conditions, banks started to study possible liquidation of the property manager that enjoyed success in 2006 after buying-out Fadesa for more than 4 billion euros.

New Bankruptcy Law

In November, Martinsa announced it would include the new regulation on insolvency which allows the firms in financial troubles to review creditors’ meeting and talk on relaxing the conditions. In 2011, when Martinsa managed to crawl out from the biggest bankruptcy process in Spain, it promised to pay 100% of the debt within 10 years.

Deficit of Martinsa Fadesa reached 4.51 billion euros. What makes its situation worse, during the nine months from January to September, the company lost more than 200 million euros. As of December 31, its assets represent a worth of 2.9 billion euros.

 

Original story: Expansión (by S. Arancibia & R. Ruiz)

Translation: AURA REE

Real Estate Companies Hope For Renewal of Their Life-Saving Law

16/12/2014 – Cinco Dias

Spanish real estate industry hopes that the Royal Decree-Law 10/2008 will be prolonged for at least one year more. Otherwise, we could witness ‘an haemorrhage’, as the new chairman of property developers association of Madrid (Asprima), Juan Antonio Gomez-Pintado, put it. His Barcelona counterpart from corresponding group Apce, Marc Torrent added that ‘a year of being in force is an absolute minimum’.

In 2008, the Government of Jose Luis Rodriguez Zapatero approved the Royal Decree as a preventive measure against massive losses of property managers triggered by value drop-off. ‘Impairment losses deriving from Tangible Fixed Assets, Real Estate Investments and related Stocks, Payables or Receivables shall not be recognized in annual corporate reporting’, the regulation states.

Disappearance of the law would have impacts on the article 27 of the consolidated text of the Corporate Law, as well as on the Bankruptcy Law 22/2003 from July 9th.

The regulation mentioned above indicates that if the losses take the equity down to below two-thirds of the social capital (for limited companies) and if during a year the firm does not recover, it must cut in the equity by necessary amount. The article 363.1. applies to all kinds of companies when the net worth posts below 50% of the share capital, which would mean either dissolution or balance recovery through the capital increase or decrease.

The Royal Decree-Law 10/2008 has been rolled over year after year, even if it was originally established for years 2008-2009 only. In 2011, a very similar regulation was approved, called the Royal Decree-Law 9/2011, which stretched the compensation period to three years.

Last March 7th, the Goverment approved the Royal Decree-Law 4/2014 with an aim to renew Zapatero’s ruling once more as ‘the exceptional period ends in 2014’.

The current Government of Spain has to decide until March whether it is going to prolong the law, which has saved many real estate firms from liquidation, or not. The authorities claim respective clauses were added to the Bankruptcy Law.

However, that regulation would not be enough to stop dissolution of the companies, reckons Mr Gomez-Pintado, as maintenance of the Royal Decree-Law is crucial while the norms on giving the second chance to viable firms are being negotiated for the other Law. Barcelona Developer Association Head Marc Torrent agreed that although the sector is surely experiencing a turning point, it is not capitalized sufficiently to face lack of the Law as the fight is also against becoming insolvent.

The Royal Decree-Law 10/2008 repeatedly appears in annual reports of real estate firms. When it comes to the listed ones, some of them managed to improve considerabe parts of their balances this year.

For instance, Colonial pointed out that if it hadn’t been to the Decree, its land affiliate Asentia would have been dissolved on 31st December 2013. The firm, now having Villar Mir as the majority stakeholder, sold the troublesome branch this year.

Furthermore, Martinsa Fadesa avoided liquidation in 2013, in spite of having net balance in the red. Quabit admitted an 18.8 million euro deficit in its accounts, but instead thanks to the Law it is planning to float its own Reit now.

Finally, Reyal Urbis, currently in talks with creditors, was shown a 429.9 million euro hole in 2013 but it defended itself from total bankruptcy by including the Royal Decree-Law 10/2008 in its annual reporting.

 

Original story: Cinco Días (by Alberto Ortín Ramón)

Translation: AURA REE

Martinsa’s One Foot In Liquidation

25/11/2014 – Cinco Dias

Property management company Martinsa Fadesa, the face of the real estate bubble which fell into insolvency in summer 2008, is closer and closer to being liquidated, once its new debt restructuring plan was rejected by creditors.

In March 2011, court extended a €7.2 billion payment obligation of Martinsa Fadesa for further 10-years. Officially, it was no bankrupt anymore. At the same time, the real estate firm promised to pay-off at least €3.2 billion owed to twelve entities but it failed to keep the word. Since last year, the 1% of that quote awaits amortization, i.e. €32 million.

Apart from the aforementioned amount, Martinsa Fadesa was supposed to face a 12.5% part of its total debt, €384 million, and sources from the sector hum it will be unable to repay that under no circumstances.

They also suggest the company could dodge the miserable end if it amortized the €32 million. However, it will probably be not able to do that either.

In the last effort to stay afloat, Martinsa went on talks with creditors on covenant change and asset give-in (mostly land), in exchange for debt write-off but the lenders said ‘no’ as it was incompatible with current legistlation.

Few days ago, taking advantage of amendments in insolvency regulations, the firm pursued its new plan called ‘Project Aurora 2’ which would allow it to trim the high indebtness by around €450 million. What is most surprising, the property company wants to keep most of its assets which are jointly valued at €1.4 billion.

In opinion of Martinsa’s main creditors, the proposal is ‘unacceptable’ and ‘inexplicable’ as it suggests the banks shall write-off 80% of the owed amount, take away assets worth a mere 19.5% part of the total, and assume that they will receive the remaining 0.5% within next eight or nine months.

Given such a development, sources close to the entities (i.e. CaixaBank, Banco Popular, Abanca -former Novagalicia-, Morgan Stanley, Royal Bank of Scotland, Sabadell, Unicaja, Liberbank, BBVA, CEISS -Caja España-Duero-, Kutxabank, Bankia and Sareb) say liquidation of Martinsa Fadesa may be an option, unless it presents a better offer.

 

Original article: Cinco Días

Translation: AURA REE

Martinsa Fadesa Tackles 37% of Its Debt

17/11/2014 – El Mundo

During the first nine months of the year, Martinsa-Fadesa lost a net amount of €201.62 million and therefore reduced its 2013 ‘red’ by 37.5%.

The firm led by Fernando Martin (pictured) said the improvement was triggered by better dwelling and real estate asset sales, as well as less financial expenditures allowing it to compensate for a €105 million provision for impairment losses.

Martinsa’s revenues increased by 34.6% from January throughout September 2014 and posted €95.15 million in total. They proceeded from delivery of 1.296 dwellings, 430 units in Spain.

Moreover, during the discussed period of time, the company sold a 40% stake it held in an office building in Paris for €353 million.

At the end of September, Martinsa Fadesa showed a capital hole of nearly €4.49 billion, just like a year before.

However, the real estate firm reminds it is not bound to go bankrupt thanks to the latest law passed by the Government, stating that property managing companies whose difficult situation derives from their asset depreciation are exempt from forced insolvency proceedings.

Martinsa Fadesa is currently in talks with its lenders on restructuring its €3.9 billion debt liability, after it was unable to pay the amount off on time due in December 2013. The next deadline was set at December 2014.

 

Original article: El Mundo

Translation: AURA REE

Real Estate Companies Cut In Debt by 23% to €12.57 Bn in H1

10/09/2014 – El Economista

There have been six years already since the real estate bubble burst and the first traces of recovery begin to appear in the balance sheets of the main property managers of the sector. Namely, they achieved trimming the total amount due to banks by 23.4%.

Six largest realtors: Colonial, Quabit, Testa, Martinsa, Reyal Urbis, Renta Corporacion, Realia and Montebalito, closed the first half of the year with €12.57 billion in the red. To compare, in H1 2013, the figure was reaching €16.42 billion.

To achieve that, the companies had to go through debt restructuring and shed their best assets via sales or in lieu payments. Although their joint indebtness still hits high, there is a hope for their balances as economic indicators show promising numbers and foreign investors eye the market in search of opportunities.

Quabit has made a U-turn in its revenues in the last year. Specifically, the company chaired by Felix Abanades has managed to trim its indebtness by €242.19 million, 41.23%, in just 12 months.

‘After four financial restructurings, Quabit may surely state it is a balanced firm without any economic stress in the short term‘, the group reports.

With clean books, net value of €65.6 million and €44.88 million in assets, the company plans to launch a Socimi on the stock market which is expected to debut still before the end of the year. Mr Abadanes hopes to raise between €300 and 500 million in shape of real estate assets, mainly residential, commercial, offices and, to less extent, logistics.

In turn, Renta Corporacion that in 2013 was pulled down to insolvency process by a €161 million financial and €27.5 million property indebtness, today celebrates crawling out of the jeopardy. To be precise, the firm beated the red down by 62% in one year. At the moment, it owes €60.32 million.

‘The assets repossessed from us have a book value of €93.7 million, while the repaid debt represents €98.6 million and therefore we registered a €4.9 million revenue‘, the group explains.

Colonial has been the first to show that it was possible to overcome the crisis. The company cut in its debt by 35.68% to €1.66 billion.

Now the firm is controlled by such big-name investors as the Villar Mir group and the Qatar Sovereign Wealth Fund. Together with them, Colonial submitted a €650 million bid for a part of Realia‘s property division Patrimonio.

On the other hand, Realia, Reyal Urbis and Martinsa are still up to their ears in debt.

Moreover, Realia‘s main shareholders (Bankia and FCC) have been seeking to sell their stakes since long. Before summer, the real estate company received several offers for a part of its indebtness from Fortress acting on behalf of funds King Street, Orion Capital and AEW.

In the middle of that process, Realia transferred its stake in French branch SIIC de Paris for €560 million. The operation helped it to beat the red down by 40.36% to €995.32 million.

When it comes to Reyal Urbis, this firm has been struggling in the voluntary bankruptcy declaration for over a year. In spite of that, the company managed to trim the debt by 23.62% to €3.55 billion.

Both Reyal and Martinsa, which reduced its debt by 14% to €4.18 billion, will be able to benefit from the new bankruptcy law.

 

Original article: El Economista (by Alba Brualla)

Translation: AURA REE

Property Managers Look Forward to the End of the Recession

22/08/2014 – El Pais

The majority of large developers that escaped the unforgiving financial crisis are trapped in vagueness which prevents them from confirming the recovery peeping into the real estate market. They no longer owe the terrific €35 billion of 2008, but they still have a €20 billion debt, crippling them from resuming their activities.

After the first five years of the recession, marked by many refinancing agreements, all the measures turned out to be insufficient as the firms still had no capacity of paying the debts. In 2013, the dinamics changed.

Only Catalonian Fergo Aisa has not survived the tough process, liquidated fast and quietly.

The undisputable master in staying afloat is Colonial. In May this year, the company enlarged its capital with a €1.263 million amount and gained such promintent investors as Juan Miguel Villar Mir (the president of OHL) and the Sovereign Wealth Fund of Qatar. Furthermore, the realtor shed the troublesome assets and earned €559 million in the first half of the ongoing year.

The business was faring so well, that Colonial decided to take part in the bidding for a 62% stake of Realia put up for sale by FCC and Bankia. Colonial has taken everyone aback by outbidding sure-bet Fortress and King Street with its €650 million offer submitted exclusively for a real estate affiliate of Realia.

However, before the best bidder acquires the branch, it must meet several requirements, like selling 9 shopping malls of Realia. Then, the real negotiations on buying 20 offices in Madrid, the Fira tower in Barcelona and the Kansas City business center in Seville will commence.

At present, after selling the stake at SIIC de Paris for €1.51 million, the real estate assets of Realia represent a value of €830 million, whereas the developer activity and the land together barely cross €520 million.

Sacyr also successfully overcame the black days of the recession, although finally it sold its arm Vallehermoso, allowing the firm to redeem a €1.2 billion indebtness.

Principally, the company had to deal with too many plots, a very common problem among property managers, such as Reyal Urbis, Martinsa-Fadesa or Metrovacesa.

When the crisis came around, banks realized they had lent nearly €15o billion to developers for purchase of 200 million square meters of land in total. As the borrowers progressively failed to pay-off their debt, six years later, the entites owned over 100 million square meters of land.

Apart from banks, the magnitude landed in balance sheets of Spain‘s ‘bad bank’ (Sareb) or was sold to investment funds with up to 60% discount. The remaining 95 square meters stay in hands of the property managers who hurry to sell them out to pay the debts.

Other companies like Martinsa-Fadesa, Reyal Urbis and Renta Corporación found themselves at the risk of being auctioned. The two first still struggle to crawl out of the insolvency process, whereas the last had managed to do so but was then hit by an unexpected €10 million debt owed to the Tax Office.

 

Original article: El País (by Juan Carlos Martínez)

Translation: AURA REE

Martinsa Revises Books & Reports €652 Mn Loss

9/05/2014 – Expansion

Martinsa Fadesa checked its books once again and raised the annual debt volume amassed in 2013 to €652.3 million. Compared to 2012, the figure is by 12% larger.

On February 28th, the company announced a €568.2 million loss registered throughout 2013, that was 2.5% less than a year before.

The group´s Ebitda showed negative €46.6 million, doubling the figures of 2012. Gains proceeding from real estate reached €109.88 million, by 27.8 % less though. The income was generated mostly in France (39%), Spain (33%), Poland (21%) and the rest in Hungary.

Impairment provisions consumed €368 million, out of which €308 million corresponded to non-financial assets and the remaining €60 million were financial. The depreciation was provoked mainly by real estate assets value loss (by 3.7% more acute than in 2012).

On the other hand, Martinsa´s financial expenses climbed to €163 million, out of which around €147 million ought to be assigned to its bankruptcy debt.

With all the figures, the real estate firm led by Fernando Martín submitted “the Aurora Project” to its lenders with hope of swapping the debt for liquidated assets.

According to sources close to negotiations, Martinsa Fadesa considers itself unable to pay-off the 12% of the entire insolvency debt this year, the deadline set by its lenders.

 

Original article: Expansión (after EFE)

Translation: AURA REE

So stands the sector.

COLONIAL

The real estate company had losses of 24 million Euros due to the impact of Asentia, the non strategic assets subsidiary, that the company wishes to get rid of.

MARTINSA FADESA

The developing company handed in during the first quarter of the year 15% more units that during the same period in 2012 and sold 77 units off plan, but all of them in the international area.

METROVACESA

The real estate company, controlled since yesterday in 99,8% by the banks Santander, Bankia, BBVA, Popular and Sabadell after its exit from the stock market, obtained gains in its residential area of 1,5 million Euros, with a negative margin of 1,9 million Euros for the sale of 11 properties.

QUABIT

The real estate company, whose parent company (Rayet) is in creditor´s meeting, assures that the first months of the year have shown a “descent in the volume of activity within the real estate sector”.

REALIA

The company, controlled by Bankia and FCC, and where Sareb could enter through a debt capitalization, assures that the gains in the residential activity “are still affected by the credit restrictions”.

REYAL URBIS

The real estate company presided over by Rafael Santamaría, that requested a creditor´s meeting in February, is one of the most affected ones, as its main business is the development. In its results for the first quarter, it confesses a “stagnation” of the commercial sales due to “the lethargy within the real estate sector”.