Tag: Monarch

A Swap from ING & CaixaBank: the Last Stumbling Block in the Sale of Santander’s HQ to AGC

27 July 2018 – Voz Pópuli

The sale of the company that owns Santander’s Ciudad Financiera is closer than ever to becoming a reality. The approval of the liquidation plan by a Madrilenian court set September as the deadline for offers. Nevertheless, there are still disputes to be resolved.

The main stumbling block now is a lawsuit in London against a swap (financial derivative) granted by five entities: Royal Bank of Scotland (RBS), CaixaBank, ING, HSH Nordbank and AG Bayerische Landesbank. The lawsuit, filed years ago, is based on a claim that RBS manipulated the interbank – LIBOR and Euribor – market. The lawsuit amounts to €800 million, given that the swap has cost around €90 million per year since 2008, according to financial sources consulted by this newspaper.

The discussion in Spain focuses on the fact that some of the creditors of Santander’s headquarters fear that the new owner of the company (Marme Inversiones 2007) will decide to shelve that lawsuit. It would require an agreement between the new Marme and the five banks party to the swap in exchange for renegotiating the derivative, which expires in 2023.

AGC’s offer

Those €800 million, if the process in London proves successful, could mean that all of the creditors recover their money. In particular, the original shareholder, the Brit Glen Maud, and the company Edgeworth Capital, owned by the Iranian investor Robert Tchenguiz, who took positions during the bankruptcy.

Other sources consulted indicate that there is a commitment from the main interested party in the Ciudad Financiera, the Arab fund AGC Equity Partners, to keep the Marme litigation case open.

Currently, the only offer on the table is the one presented by AGC in 2016 for between €2.5 billion and €2.8 billion, depending on the variables that are included. A year earlier, Aabar Investments, the owner of Cepsa, and Edgeworth, also submitted bids. But they were not accepted.

As we wait to see what will happen over the next two months, AGC leads the rest of the candidates to acquire Santander’s headquarters.

One of the possible counter-offers could come from Edgeworth, which negotiated a €2 billion loan with JPMorgan to participate in the liquidation plan. It also proposed that the company exit from bankruptcy without the need to be liquidated.

This operation would generate a sale with significant gains for the funds that entered the process by buying Marme’s debt from financial institutions. They include Blackstone, Canyon and Monarch.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

JP Morgan Negotiates €2bn Loan with Owner of Santander’s HQ

22 February 2018 – Voz Pópuli

There’s a new player in the complicated game of chess involving the bankruptcy and liquidation of the owner of Banco Santander’s headquarters, the Ciudad Financiera, in Madrid. One of the largest investment banks in the world, JP Morgan, is negotiating a €2 billion loan to unblock the bankruptcy proceedings, according to financial sources consulted by Vozpópuli. JP Morgan declined to comment about the rumours in the market. Market sources indicate that the loan has not been granted yet.

In this way, the US entity would support one of the shareholders, the company Edgeworth Capital, owned by the Iranian businessman Robert Tchenguiz. That banker is trying to get Marme Inversiones 2007, the company that owns the office complex, to emerge from bankruptcy without having to file for liquidation. To this end, it has asked Mercantile Court number 9 in Madrid to give it the green light to negotiate an early termination for payments with the creditors.

That is where JPMorgan comes in. Tchenguiz has managed to convince the entity to consider financing almost €2 billion, which would have to be used to repay all of the creditors, including several banks such as CaixaBank, ING, RBS and Santander itself, as well as funds such as GSO (owned by Blackstone), Canyon, Burlington, Värde Partners, Centerbridge and Monarch.

Many of these creditors, above all the funds that purchased debt at a discount, agree with Tchenguiz. But not the other shareholder, the British magnate Glenn Maud, who is preparing to make a rival offer, or Santander, which is leaning towards the proposal put forward by the Arab fund AGC.

Status of proceedings

After years of bankruptcy and hundreds of resources, the situation is closer than ever to being unblocked. In fact, the court has already given the green light to the liquidation plan for Marme Inversiones 2007. The problem is that two other parent companies, Delma and Ramblas, are still immersed in bankruptcy proceedings. A resolution is expected before the summer.

Unless there is a new legal war, all indications are that the financial situation of the owner of the Ciudad Financiera will be resolved this year.

Along with the proposal from Tchenguiz, the fund AGC and the consortium Madison-Maud-GCA are studying putting between €2.7 billion and €2.8 billion on the table for Santander’s headquarters, within the liquidation process.

Together with JPMorgan, Goldman Sachs is also positioning itself in this operation. It has been advising Santander for months on the solution that may be found to resolve the situation of its headquarters.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake