Realia Completes its €149M Capital Increase

2 January 2019 – Eje Prime

Realia has completed its capital increase. The real estate firm owned by the Mexican magnate Carlos Slim has completed its €149 million capital increase with a final injection of €42.1 million, according to a statement filed by the company with Spain’s National Securities and Market Commission (CNMV).

In its latest expansion phase, the company has issued 175.4 million new shares in total, for a nominal value of €0.24 and an issue premium of €0.61 per share. The company’s share capital has thereby been consolidated at €197 million, divided into 820 million shares.

Since Slim took control in 2015, Realia has undertaken three capital increases in total. The latest is the operation closed today, which was approved in November to try to decrease the company’s debt, which amounts to €672 million, and to provide a financial boost to its real estate businesses.

Slim controls 70.76% of Realia’s capital, 33% in a direct way and 36.98% through the construction group FCC, which is also led by the Mexican businessman. The real estate company also has an asset portfolio spanning approximately half a million square metres, which includes one of the Kio Towers in Madrid.

Original story: Eje Prime

Translation: Carmel Drake

Socimi VBare Enters Málaga, Expands in Madrid & Increases its Share Capital by €3.2M

13 June 2018 – Eje Prime

VBare is embarking on a new phase and is branching out beyond Madrid. The Socimi is finalising the purchase of its first assets outside of the Spanish capital, in Málaga, and is continuing to expand its portfolio in Madrid, according to explanations provided by Fabrizio Agrimi, Director General of VBare, speaking to Eje Prime. Moreover, last week, the group closed a capital increase through which it raised €3.2 million to finance new purchases.

The Socimi, which ended the first quarter of the year with 210 assets under management, has set itself the objective of expanding its portfolio to include 261 residential units under management. To this end, the company is on the verge of signing the purchase of two assets, one in Málaga, which will be VBare’s first venture outside of Madrid, and the other in the Spanish capital.

“We hope that the asset in Málaga will be incorporated into our portfolio before the end of June”, says Agrimi. The asset is situated “in a central location” and comprises fourteen residential units. VBare is going to pay around €1.5 million for the asset, including the cost of the renovation that it will undertake before putting it on the market.

The second property is located in the centre of Madrid, and although sources at the Socimi are not able to provide many details about that acquisition, they say that it will comprise around 35 units located “in the city centre”. Currently, 91% of VBare’s portfolio is occupied and “if it weren’t for the renovation projects underway, the occupancy rate would be 95%”, according to the director.

In order to undertake all of these purchases, VBare recently completed a capital increase that could have amounted to €14 million, as disclosed by Eje Prime, but which ended up raising €3.2 million, with the sale of 240,457 new shares.

“It will not be long before we carry out another capital increase given that, due to the timings, several shareholders, possible investors close to the Socimi and other new players missed out on the opportunity to contribute capital this time around”, explains Agrimi (…).

With that capital increase now completed, VBare is going to study the acquisition of “whole buildings, portfolios of dispersed assets and portfolios of assets in single complexes, with the aim of maintaining a balanced portfolio to avoid concentration risks, and obtaining a competitive advantage over the other players in the market consistent with the identification of opportunities with little competition and at below market prices”.

Moreover, the company’s route map includes acquiring assets with a net direct yield of “no less than 4%, as well as properties for which we can obtain an acquisition price with an average discount on the market value of no less than 10%”.

In March, the company acquired a package of assets comprising twelve homes and a commercial premise at number 5 Calle Concordia in the Madrilenian town of Móstoles, according to a statement filed by with group with the Alternative Investment Market (MAB).

Of the twelve homes that it acquired from the Eureka business group, five have tenants and the others are “in optimal conditions for their immediate rental”. The net yield of these assets is estimated to amount to 5.9% once they reach fully occupancy.

VBare is a real estate investment vehicle specialising in the acquisition and management of residential assets for rent. The company was constituted in March 2015 with the aim of generating high returns for its shareholders through the implementation of a value-added strategy and to take advantage of opportunities in the Spanish residential market, which is showing clear signs of recovery.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Oceanwood to Strengthen its Position in NH Following €280M Capital Increase

8 May 2018 – Expansión

The British investment fund Oceanwood is going to strengthen its position in the hotel chain NH Hotel Group, of which it is currently the second largest shareholder with a 12% stake, following the capital increase that the company is expected to carry out in the near future.

The hotel chain is going to increase its share capital to finance a convertible bond issue undertaken in 2013, which is due to expire at the end of this year, but which may be exchanged for shares before the end of that period, in accordance with the conditions of the issue.

NH will handover 50.8 million shares to the bondholders, equivalent to 14.5% of the existing share capital. The company already has 7.5 million own shares, and so the capital increase will involve the issue of 43 million new shares, which at current market prices represents a total sum of around €280 million. With this operation, NH will manage to reduce its debt with the issue of new shares and will thereby advance with its objective to improve its level of leverage.

Of NH’s major shareholders, Oceanwood was the only one to participate in the issue, subscribing almost 30% of the debt, which means that its stake will amount to 15.5%, whilst HNA, with 29.5% of the share capital and Grupo Hespería, in the hands of the businessman José Antonio Castro, with 9%, will see their stakes in NH diluted. The price of the conversion was set at €4.92 per share back in the day, whereas NH’s share price closed yesterday at €6.43, which implies a 30% appreciation over the conversion price.

Although the bond is not due to expire until November, the Board of Directors has the authority to force its conversion ahead of time given that one of the conditions included to that effect in the brochure has been fulfilled. Specifically, the conditions of the issue indicated that in the event that NH’s share price rises above €6.39 for more than 20 days during a 30 day period, then the company could force the conversion. That situation was achieved last week. The board met on Wednesday to present the company’s results.

Last October, NH announced that it had fully repaid and cancelled all of the senior debt obligations issued amounting to €250 million, with maturity in 2019 and whose principal pending payment amounted to €100 million.

The group’s gross debt amounted to €736 million at the end of last year and the bulk of that debt is due to mature in 2023.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Carlos Slim On Verge Of FCC Takeover

13 January 2016 – Expansión

The conditions that Esther Koplowitz and Carlos Slim, the majority shareholders of FCC, agreed on 27 November 2014, to facilitate a €1,000 million capital increase and the refinancing of the business woman’s personal debt, may now become an obstacle that stands in the way of allowing the Mexican investor to guarantee the construction company’s latest capital increase, amounting to €709 million.

Slim has committed to subscribing for all of the new shares (totalling €118.2 million at €6 per share) that are not placed during the preferential subscription period. This guarantee exposes him to the possibility of exceeding the threshold of holding a 30% stake in FCC, which would force him to launch a takeover for 100% of the company.

However, the terms of the shareholder agreement signed with Koplowitz in 2014 prohibits the Mexican investor from exceeding the 30% threshold until the end of 2018. The agreement, which was submitted to the CNMV on 27 November 2014, clearly states that, “the parties agree to not increase their individual stakes in FCC above 29.99% of the share capital (that carry voting rights) for the duration of the lock-up period (four years)”.

Sources close to the company say that the most likely course of action is that both shareholders will agree to modify the shareholders’ agreement to lift or ease the limits to allow an increase in their (permitted) stakes, above all, given that, in less than a month, Slim has increased his shareholding from 25.6% to 27.2%. “He is marking the field of play and launching a clear message to the market ahead of the upcoming capital increase”, say the sources.

Slim is already exposed to an identical situation in Realia, in which he now holds a stake of more than 30% following a €89 million capital increase. He is currently waiting for the CNMV to release him of the obligation to launch a takeover.

Even if the waiver for Realia is accepted by the CNMV, it would not apply in the case of FCC, given that Slim is the majority shareholder and none of the other shareholders in the company have a stake of more than 30%. At market prices, the formulation of a takeover of 100% of FCC may cost Slim around €850 million, if he exceeds the threshold of 30% (excluding the 22.4% stake held by the Kolpowitz family).

Yesterday, trading on the stock exchange closed with a share price of €6.89 for FCC, i.e. 15% above the price set for the capital increase (€6/share). FCC’s €709 million capital increase is the latest measure adopted by Slim to complete the restructuring of his stake. The construction company wants to use the funds to repay some tranche B debt amounting to €450 million. It pays interest of 5% on the loan and it determines the group’s investment policy and shareholder remuneration.

In exchange for this repayment, the creditors must agree to commit to applying a discount of at least 15%. This is the same discount that was applied to the previous restructuring in which FCC refinanced debt worth €4,512 million.

Original story: Expansión (by C.Morán)

Translation: Carmel Drake