Tag: negotiations

Wanda Plans To Sell Edificio España Before August

26 May 2016 – Cinco Días

The Chinese group Dalian Wanda is pushing ahead with the sale of Edificio España, and at the same time it is continuing its negotiations with the Town Hall of Madrid to refurbish the building. The process to complete the transaction is progressing quickly. In fact, the company owned by the magnate Wang Jianlin expects to close the deal before the summer holidays, according to sources close to the talks.

Over the next two weeks, the Chinese group will receive the first non-binding offers from parties interested in buying the building, where Wanda plans to open a hotel and luxury homes, as well as a shopping arcade. These bids will be analysed and a due diligence process will begin. Wanda expects to have closed the sale before August.

For this process, the Chinese investor has engaged the real estate consultancy JLL to act as intermediary, which is pushing ahead with the transaction. Both Wanda and JLL are conducting the transaction with the utmost confidentiality. (…).

The sources consulted understand that Wanda has lost interest in this Madrid mega-project, as it has been unable to carry out its refurbishment plans, which included demolishing the property to reconstruct it from scratch in a similar form to the original. In the face of the rejection from the Town Hall, the Group has decided to forego the complicated refurbishment.

Nevertheless, Wanda is continuing its negotiations with the municipal technicians to find a solution for tackling its future renovation and whereby obtain the necessary construction permits. Market sources insist that it would be positive for the Chinese Group to have these permits, because they will add value to the property for the potential buyers, as would resolve the problems with the Town Hall of Madrid regarding the renovation.

Companies reported to be evaluating the purchase come from Asia, Europe and USA. In some cases, these companies and funds are looking to form alliances with Spanish partners or with firms that have knowledge of the local market, so as to entrust the refurbishment work to them. The figure being talked about in the sector for the sale amounts to just under €300 million.

Wanda paid Santander €265 million in 2014 for the skyscraper, constructed in the 1950s, which is currently unoccupied. It planned to undertake an ambitious renovation, which included reconstructing the building from scratch, but it met with refusal from the Local Heritage Committee, in which the Town Hall (Ahora Madrid) and regional Government (PP) participate, due to the protection afforded to the façades. However, differences of opinion started to emerge last year. The Asian conglomerate decided to put the building up for sale in February. In recent weeks, however, it has resumed talks with the Town Hall.

Nevertheless, there was a new twist in the tale on Monday. The President of the Asian conglomerate broke his silence to confirm that he is still waiting for official confirmation from the Town Hall that his company will be allowed to demolish the property and rebuild it from scratch. “The Town Hall is holding talks with us again saying that we can demolish it. We are waiting for a written document to confirm this, rather than their verbal promise”, said the Chinese magnate to CCTV, the state television channel in his country.

In this way, he contradicted the team led by Manuela Carmena, which has stressed to date that it will not allow the demolition. Sources close to the project say that they do not know why the Chinese officials in Spain agreed to not demolish the building after months rejecting the municipal proposal and they consider that they have gone to the limit to obtain the upper hand in the negotiations.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Soros Will Inject €37M Into Hispania’s €231M Capital Increase

12 May 2016 – El Economista

Hispania has resolved to launch a capital increase amounting to €230.7 million, with the aim of raising funds to allow it to continue investing in the purchase of new real estate assets, according to reports by the Socimi.

The company’s largest shareholder, George Soros, has already expressed his attention of participating in the operation, in line with the 16% stake that he holds in the firm. That means he will inject another €37 million into the business.

By virtue of the increase, Hispania will issue 25.8 million new shares at €7.95 per share, a price that represents a 37.5% discount with respect to the closing price on the stock market on Wednesday (€12.74).

The company expects that the increase will be completed by 9 June, when the new shares should start trading. The operation will begin within the next few days, just as soon as Spain’s National Securities Market Commission (CNMV) gives the green light to the information brochure.

This is the second capital increase that Hispania has launched within the last year, following the accelerated capital increase that it completed in April 2015, through which it raised €337 million.

In this case, the Socimi is resorting to its existing shareholders once again, given that “it has already committed all of its investment capacity” and because it has already identified investment opportunities amounting to €1,500 million and is in “advanced negotiations” to complete the purchase of new real estate assets amounting to around €200 million.

In this way, the company chaired by Rafael Miranda expects to continue increasing its asset portfolio, which comprises hotels, offices and residential properties, worth €1,425 million at the end of 2015, up by 14.8% on the purchase price.

Original story: El Economista

Translation: Carmel Drake

Eroski Finalizes The Sale Of Its Real Estate Company Gonuri And Other Assets To Raise EUR 300 Million By August

7 February 2016 – El Diario Vasco

Eroski is working around the clock to give their creditor banks “enough comfort” – as financial people say, by the end of the month. The group led by Agustin Markaide must complete before March the sale of sufficient real estate assets to repay EUR 299 million to those entities which last year agreed refinancing over EUR 2,500 million in debt until 2019.

Actually, Eroski does not have to pay in the coming days, but show the banks sufficient documentation proving that the negotiations are going well and that it will satisfy the payment before July 31st, when the six-month grace period of that tranche of refinancing matures.

Original story: El Vasco (by Julio Díaz de Alda)

Translation: Aura Ree

Carmena: Town Hall In Talks With Wanda Over Edificio España

27 January 2016 – El Economista

At a press conference yesterday (Tuesday), the mayoress of Madrid, Manuela Carmena, announced that the Town Hall of Madrid has made “a new proposal” to Wanda regarding its Edificio España project…and she added that she does not expect the Chinese investor group to abandon the project, given that it is continuing to participate in negotiations. (…).

Representatives from the Town Hall of Madrid reportedly met with the Chinese investor group last week and the conversations are on-going. (…).

At no point has the possibility of demolishing the façade and rebuilding it brick by brick been entertained, given that it is something that is actually technically unfeasible. The solution involves aligning legal compliance and maintaining the protected features, with the transformation of building that Wanda wants to undertake. (…).

Lots of options

In light of the widespread media attention, Carmena said that “our conversations with the group are on-going” and she added that the Town Hall “is very interested in the fact that this group may construct a hotel in Plaza de España”. (…).

The delegation pointed out that the protected features are not determined by the Town Hall, but rather by the Local Heritage Committee, in which the Town Hall participates and which is chaired by the Community of Madrid, which holds the majority. At the time, thhat body ruled that “it was feasible to undertake the building work, whilst maintaining the protected features”, in other words, it ruled that the proposal to demolish the façade was not an option. (…).

José Manuel Calvo, from the Department for Sustainable Urban Planning, insisted that the project was progressing “as normal”, given that talks are on-going with the company, just as they are with other companies. This normality manifests itself by the fact that the Town Hall has already prepared the compulsory detailed study and that it will process the initial approval as soon as the investor group gives them the go ahead. The Town Hall “will be delighted” to proceed. Following that approval, construction work may begin within two or three months.

The representative of the Department for Sustainable Urban Planning added that if the construction work begins, the Town Hall reserves the right to “secure guarantees” from Wanda to ensure the progress of the work. (…).

Meanwhile, Manuela Carmena answered that “of course she was unable” to guarantee that the renovation of Edificio España would be completed before the end of her term in office because she doesn’t even know how long the construction work will take. (…).

When asked about whether the Town Hall would be more flexible in the face of the hypothetical exit of the investor, Carmena answered that the Town Hall “is not afraid”, but does have a “responsibility” to ensure that Madrid is a more “beautiful and prosperous” city. (…).

Original story: El Economista

Translation: Carmel Drake

Edificio España: Renovation Prohibited So Wanda May Sell

13 January 2016 – Expansión

The Chinese company Dalian Wanda is considering putting the iconic Edificio España building on the market. It acquired the property from Santander for €265 million in 2014, but is not being allowed to completely renovate it and convert it into a luxury hotel, with a retail space and homes.

The group founded and led by Wang Jianlin wanted to pull down the tower, located in Plaza de España (Madrid) and reconstruct its façade with a design that is identical to the current one, however the new Town Hall of Madrid, led by Manuela Carmena, has rejected those plans, on the basis that the façade must be protected as it forms part of the city’s artistic heritage.

After months of fruitless negotiations between the Asian company and the Town Hall to begin the construction work, Wanda has now decided to sell the building, according to several sources consulted by this newspaper.

As a preliminary step, Wanda Madrid Development has decided to close the office that it opened in the Spanish capital to carry out the remodelling of the iconic building, which has stood empty for many years.

Following the commotion caused by the plans set out by Jianlin, the wealthiest businessman in Asia, the Town Hall of Madrid said yesterday that it was not aware of any plans for the building to be sold.

Meanwhile, the PP’s spokesperson at the Town Hall, Esperanza Aguirre, asked the municipal Government to “think twice” and allow Wanda to demolish and reconstruct Edificio España from scratch, because losing the investment (opportunity) and the jobs that would result from the Asian group’s plans would have “very serious consequences”. The spokesperson for Cuidadanos, Begoña Villacís warned that, if the decision is confirmed “Madrid could become an investment desert” since it is “a city with lots of development projects on the table and investment opportunities that we must not miss out on”.

Background

Despite the disagreements, Dalian Wanda, which also paid €45 million for a 20% stake in Atlético de Madrid last year, reaffirmed “its commitment” to “the citizens of Madrid” in October last year, as well as to the restoration of an “icon of the urban landscape”. The group confirmed that it was willing to hold “open and transparent dialogue, provided safety and the law are put first above everything else”.

At the end of November, the councillor for Urban Planning at the Town Hall, José Manuel Calvo, confirmed that the plans were moving ahead to enable the renovation work to start “as soon as possible”, although the administrative procedures must first be completed.

Madrid’s local historic heritage committee issued a binding ruling, which resolved that the façade must not be demolished or dismantled, but Wanda insisted that maintaining such a tall façade during the renovation work would be unsafe, which is why the company proposed that it be dismantled and then reconstructed.

Original story: Expansión (by R.R./A.F.)

Translation: Carmel Drake

Wanda Negotiates Purchase Of 75% Of Marina d’Or For €1,200M

2 December 2015 – Expansión

The Wanda group is holding negotiations to acquire 75% of the shares in the Spanish holiday complex Marina d’Or, located in Oropesa del Mar (Castellón), which is currently owned by the businessman Jesús Ger.

The purchase will amount to around 8,200 million Chinese Yuan (i.e. around €1,200 million), according to reports yesterday by Diario del Pueblo.

The newspaper reports in its digital edition that the founder and president of the group, Wang Jianlin, the richest man in China, has already visited the complex (which includes a golf course, a theme park, five hotels and a spa, amongst other buildings) together with other representatives from the company.

The official body of China’s Communist Party cites own sources for the basis of its information. When contacted by Efe, the Wanda group declined to make any comments on the subject for the time being.

Meanwhile, the Castellon group did not want to confirm or deny the talks and merely stated that it has been in touch with several Arab, Chinese and other investors over the last few months regarding their interest in its iconic project: Marina d’Or Golf, an urban development plan that was suspended several years ago. The group itself valued the project at €1,300 million, even though not a single brick has yet been laid.

In July, Jianlin revealed that his company would make at least three major overseas acquisitions over the next six months, after it expanded its entry into the sports sector this year with the purchase of Triathlon Corporation, the owner of events’ rights such as Ironman, and Infront, one of the largest sports rights companies in the world. (…).

Original story: Expansión

Translation: Carmel Drake

The March Family Enters The Bidding For ‘Torre Espacio’

31 July 2015 – Expansión

Torre Espacio has a new suitor, in the form of the March family, which has formally expressed its interest in acquiring the skyscraper in the Cuatro Torres complex (Madrid) from the current owner, Grupo Villar Mir. The family is up against Amancio Ortega – the owner of Inditex – the German fund Deka and Canada Pension Fund.

Inmobiliairia Espacio, the holding company of Villar Mir, put the property on the market at the end of June and engaged the consultancy firm Aguirre Newman to manage the sale. The company has already received preliminary bids for the property, which it plans to sell for between €650 million and €700 million, whereby taking full advantage of the revival in the real estate sector currently underway in Spain. However, the offers received for Torre Espacio so far range between €500 million and €600 million, albeit above its book value (€440 million). Villar Mir invested €400 million in the construction of the building.

The firm’s intention was to select one or two candidates to participate in exclusive negotiations, with the aim of closing the deal in October.

The March family’s bid for Torre Espacio is indicative of its growing interest in the real estate sector. The family has just acquired Ahorro Corporación’s headquarters on the Paseo de la Castellana (Madrid) for €147 million through its company Corporación Financiera Alba.

Original story: Expansión (by Y.B.)

Translation: Carmel Drake

Slim Set To Acquire Realia After Hispania Withdraws Its Bid

24 July 2015 – Expansión

The Mexican businessman, who already owns 25% of the real estate company, has now been given free rein to make an agreement with Realia’s creditors.

The takeover war for Realia came to an end on Wednesday, one day before the deadline for its approval. The Socimi Hispania Real, a subsidiary of the listed company Hispania, announced on Wednesday that it was withdrawing its public bid to acquire Realia’s shares, which it had launched in November 2014.

Hispania’s Board of Directors have decided to withdraw, rather than improve, their bid of €0.49 per share, despite the offer (€0.58 per shares) submitted by their competitor, the Mexican businessman Carlos Slim, through his real estate company Carso.

Hispania’s decision leaves Realia’s shareholders with just one alternative, the one presented by Slim, who already controls 24.9% of the real estate company, after he purchased the stake previously owned by Bankia.

Nevertheless, it seems unlikely that this bid will be successful either. According to sources close to the process, the percentage of shareholders agreeing to Carso’s bid did not exceed 1% of the capital on Wednesday, a situation that would not only not harm Slim’s interests, but that would actually benefit him by preventing the creditors from executing Realia’s debt.

Lower price

The offer presented in March by the Mexican businessman falls well below the listed price of the real estate company. The company’s shares closed trading on Wednesday at €0.705, despite having fallen by 2.08%, to place the market capitalisation of the company at €216.7 million. Slim’s bid price values Realia at €30 million less.

The change in control of Realia would result in the early repayment of the €1,170 million debt held by the real estate company. Almost €800 million of that amount was loaned by the funds Fortress, King Street and Goldman Sachs. Those three creditors had made an agreement with Hispania to not enter into negotiations with any other candidate regarding the purchase of Realia for 10 months. Now that the Socimi has withdrawn its takeover offer, that agreement is void.

That loan is due to be repaid at the end of 2016. If Slim does not acquire more than 30% of Realia, then the change of control clause will not be invoked and no early repayment will be required.

Even if he does not manage to buy more shares, Slim may still be able to control Realia with the support of FCC, in which he is primary shareholder, with a 25.6% stake. The construction company, which owns 36.9% of Realia, has said that it would not sell its stake in the event of a takeover.

In his takeover prospectus, Slim – who is being advised in this process by the law firm Ontier – considered the possibility of negotiating with the creditor funds to capitalise some of the loan, amongst other options – he also considered undertaking a capital increase, whereby allowing new shareholders to enter and diluting his own shareholding.

During the first quarter of 2015, Realia generated turnover of €23.3 million, i.e. 33.9% less than in 2014, whilst its net profit amounted to €170,000, compared with a loss of €7.6 million in the previous year.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Quabit Reaches Agreement With Sareb To Restructure Its Debt

30 June 2015 – El Mundo

After several months of negotiations, Quabit Inmobiliaria and Sareb have reached an agreement to restructure the debt that the RE company owes the ‘bad bank’ – it represents 72% of the Quabit’s total financial debt and was due to mature in 2016.

The agreement has been ratified by the Boards of Directors of both companies, and is pending legal implementation, which is expected to take place in July.

Under the terms of this new agreement, Quabit commits to make an advanced payment of €35.6 million before the end of the year, which will allow it to free up assets with short term development potential, where there are plans to build around 1,000 homes. In parallel, a new calendar of maturities has been established, which extends until 2022.

Similarly, regarding the debt associated with the stock of finished products (53 homes), both entities have agreed to set new minimum sales prices, which will allow them to speed up the sale of the residential “stock” and repay the corresponding debt.

The signing of this agreement will provide Quabit Inmobiliaria with the possibility of realising the capital increase that it plans to propose at its General Shareholders’ Meeting today (30 June 2015), amounting to approximately €70 million.

With respect to the rest of the group’s debt, the payment of the majority (representing 24% of the total) is limited to the specific assets that guarantee it. For the remaining 4%, the entity will have to agree similar conditions to those just reached with Sareb.

“The signing of this agreement will allow us to handle the long-term future in an optimistic way. Also, it places us in a strong position to become a leading, active agent in the sector once more. In recent years, we have been working on stabilising our financial structure and now we have the opportunity to develop new investments and projects”, said Félix Abánades, Chairman of Quabit Inmobiliaria.

On the other hand, he added that “both entities are satisfied with the joint work performed and the agreement reached. Quabit has laid the foundations to secure its future, to actively manage and develop its own assets and to meet its debt payments.

Original story: El Mundo

Translation: Carmel Drake

Blackstone, Merlin, Hispania & Eurosic Bid For Testa

11 May 2015 – Expansión

The US fund, the two Socimis and the French real estate company have all submitted bids for Sacyr’s subsidiary. The construction group is also considering other options, such as performing an IPO of 30% of Testa’s share capital.

Sacyr now has four proposals on the table for the purchase of its real estate subsidiary Testa. The Socimis Merlin Properties and Hispania, the US fund Blackstone and the French real estate company Eurosic have all submitted bids to acquire Sacyr’s subsidiary, which owns assets worth more than €3,100 million.

Sacyr engaged Lazard to organise a competitive process for the interested parties to bid for Testa. The deadline for proposals was Friday and in the end, four offers were received for the construction company chaired by Manuel Manrique.

Bids were invited for 30% of Testa, the stake that Sacyr had initially planned to place on the stock exchange (it currently controls 99.2% of the capital) as well as for the entire shareholding. In the end, Merlin, Hispania, Blackstone and Eurosic have all expressed interest in acquiring 100% of the real estate company, according to sources close to the process.

Proposals

Of the four candidates, only Merlin Properties had already formally expressed its interest in Testa. Now, the Socimi, which completed a capital increase amounting to more than €613 million last Thursay, has increased its bid to include 100% of the company.

The real estate company Hispania Activos Inmobiliarios has joined Merlin, the largest Socimi by market capitalisation. Hispania is owned by George Soros and John Paulson, and channels the majority of its investments through its Socimi Hispania Real. It has now fixed its gaze on Testa after trying to acquire one of the country’s other real estate companies, Realia.

Hispania, which is still waiting for a response from CNMV to the counter offer made by Carlos Slim to its bid for Realia, will now propose a similar transaction for Testa, whereby taking advantage of its access to funds from international investors.

Another one of the candidates is the French real estate company Eurosic. Last year, the company purchased Realia and Colonial’s shares in SiiC de Paris, for a total of €868 million. Now, it is looking to expand its portfolio of assets by backing the Spanish market, where the macroeconomic forecasts and the real estate environment point to an imminent rise in rental prices. Eurosic is participating in the process along with a foreign institutional fund.

Blackstone, the largest investment firm in the world, is behind the fourth proposal. This US fund has been investing in the Spanish real estate sector since 2013, when it acquired 1,860 rental homes from the Municipal Company for Housing and Land (Empresa Municipal de Vivienda y Suelo or EMVS) in Madrid. Moreover, Blackstone is the owner of four office buildings in Madrid and Barcelona, leased to companies such as Citibank and HP, as well as several logistics centres distributed across various locations.

The sale of 100% of Testa is just one of four scenarios that Sacyr is contemplating. As well as the possible sale of 100% of the company, the construction firm chaired by Manuel Manrique is also exploring the possible entry of a strategic partner to work together with Testa to realise the original plan of placing up to 30% of the company’s share capital on the stock exchange through an initial public offering (IPO).

Furthermore, Sacyr is evaluating a transaction that would have a much greater strategic impact and would involve the merger of Testa with another large real estate group. To that end, the company has begun preliminary conversations with Colonial to create the largest company in the sector in Spain and one of the largest in Europe.

On Saturday, Colonial said that “it would evaluate any invitation to participate in the eventual sale of Testa”. However, the group said that it is not “currently” studying any integration with Sacyr’s subsidiary.

In February, the construction company approved an “accordion operation”, where Testa regularised its finances with its parent company, subject to a capital increase of €500 million, which would allow the real estate company to strengthen its balance sheet. It is during this phase that the negotiations with Colonial would be addressed, according to sources close to the process.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake