Asur’s Two Hotels Go Up for Auction for €70M

30 November 2017 – ABC

The judge of Mercantile Court number 2 in Sevilla, Pedro Márquez, has approved the liquidation plan for the company Ámbito Sur Hoteles (Asur), which includes the direct sale, by auction, of the two production units associated with the four-star hotels that the company owns in La Línea de la Concepción (Cádiz) and Isla Antilla (Huelva). Both are operated by the chain Ohtels. Asur, which also owns land in Manilva as well as 81 tourist apartments in La Línea, filed for liquidation after accumulating debt of €90 million, most of which corresponded to loans from Banco Popular (now Santander), Cajasur, Sabadell and Sareb (the so-called bad bank).

The Hotel Asur Campo de Gibraltar and its adjacent car park are worth €21 million, although the debt associated with that production unit amounts to €20.7 million, mostly loaned from Cajasur. Meanwhile, Hotel Asur Islantilla Suites & Spa has an asking price of €48.7 million and that is offset by loans amounting to €41.5 million, of which €38 million was initially granted by Banco Popular (now Santander). That hotel also houses a conference centre.

Although several creditor banks made a request for the mortgage debt over the hotels to be foreclosed, the judge from the Mercantile Court has ruled for them to be sold as separate production units, relegating the mortgage foreclosure to a subsequent time if the auction is abandoned (…).

The bankruptcy administrator, in the hands of the law firm Maio Martínez Escribano, will receive offers for the hotels and the two plots of land in Manilva until 16 December. If by then it has not received any offers for more than 75% of the real value of the estates, then the period for the submission of offers will be extended by one month, to 16 January.

If an offer is received for less than 75% of the real value of the hotels, the main creditors (Cajasur in the case of the hotel in Campo de Gibraltar and Santander in the case of the hotel in Islantilla) will have to approve the operation. The bankruptcy administrator will have the power to choose the most favourable offer without having to obtain legal authorisation for the sale.

In the event that the two hotels are not sold directly through this first auction, the sale will be undertaken through a specialist entity, such as a real estate consultancy firm, which will be granted a five-month period to that end. If that sales option also fails, a “dación en pago” of the properties will be carried out. Only in the event that the hotels cannot be sold in that way either will the properties be auctioned off individually and not as production units.

The history of Asur

The company Asur was created in 2010 by the Basque group Bruesa Construcción and the Nazarene real estate company Baremos Área Inversiones (…).

Original story: ABC (by M. J. Pereira)

Translation: Carmel Drake

Repossessions Still ‘Haunt’ Mortgages Granted At End Of The Boom

6 March 2015 – Cinco Días

So far, the economic recovery has not been sufficient to slow the increase in the number of mortgage foreclosure processes. In fact, 2014 closed with a total of 119,442 mortgage foreclosures in the property register, of which 70,078 related to homes (5.9% more than a year earlier), according to figures released by INE on Wednesday. The statistics also revealed that six out of every 10 of these processes (61.6%) related to loans granted between 2005 and 2008, i.e. at the end of the real estate boom.

Those are the most vulnerable loans; the ones that have the highest probability of ending up in foreclosure, as a result of what happened in the market. For the individuals who purchased their home between 2005 and 2008 paid the highest prices ever seen. If we add to the mix the fact that they were also more likely to be granted so-called high-risk mortgages, i.e. those with a loan-to-value ratio of more than 80%, then when prices began to decrease in 2008, their own particular terrible ordeal began.

Although no official statistics are compiled about how many mortgages with high loan-to-value ratios were granted during that period, during the bubble, they (are estimated to have) accounted for up to 18% of new loans (today they account for more than 13% of new mortgages, according to the Bank of Spain). This means that as soon as property prices decreased, the holders of those mortgages were trapped in a situation whereby they were technically bankrupt (with negative equity), since their liabilities (the debt pending payment on their mortgages) was greater than the value of the assets (the price they would obtain for their homes even if they managed to sell them).

Naturally, “when you are facing financial difficulties and you know that even if you sell your house you won’t be able to pay off your mortgage due to the loss in value of your property, then thaat acts as a kind of incentive to not continue making your mortgage repayments”, admits one financial institution.

In addition to the situation being faced by the holders of these mortgages, INE’s statistics also show that more mortgage foreclosure processes were recorded in 2014 than during the previous year. Of the more than 70,000 processes relating to homes, 44,682 related to homes that were owned by individual people and of those, 77.6% or 34,680, were processes in which the house that formed the subject of the process was the primary residence of the family unit, up 7.4% from 2013.

Foreclosure versus eviction

This is a pressing situation for the families and a tragedy in every single case, but as INE explained yesterday in its press release, not all of the mortgage foreclosures that are initiated and recorded in the property register end with the eviction of the owners. This is because the legal process that is launched at that stage (and counted for statistical purposes) may give rise to a number of alternative outcomes, such as an agreement to restructure the debt, which would prevent the owners from losing their property.

Moreover, if we compare this figure of 34,680 primary residences affected by a mortgage foreclosure process over the total number of family homes that exist in Spain (18,362,000), the percentage of those affected by a possible eviction amounts to just 0.18%. Another way of looking at the significance of these figures is to take the number of mortgages constituted during the period 2003-2013 over the total number of homes, as a benchmark. In this case, only 0.9% of the mortgages constituted resulted in a mortgage foreclosure process in 2014.

Another interesting fact from INE is that 16.3% of the mortgage foreclosures over homes last year were initiated over new homes, whilst the remaining 83.7% related to second-hand homes. In the case of new build properties, that figure represented a decrease of 4.3%, due to the ever decreasing weight of those properties in the market; whereas in the case of second-hand homes, there was a notable increase of 8.2%.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake