Tag: nominal value

Offers for Gescobro Fall Short of Cerberus’s Asking Price

13 May 2019 – La Información

Cerberus Capital Management cannot find a buyer for Gescobro. The US investment fund put the debt recovery specialist on the market at the beginning of the year, but so far the offers submitted have fallen well below its expectations in terms of price.

Hoist Finance, the Spanish subsidiary of a Swedish bank, and Cabot, a British fund dedicated to the purchase of non-performing loans (NPLs), have expressed the greatest interest in Gescobro, but their offers, amounting to around €200 million each, fall well short of Cerberus’s initial expectations of between €300 million and €350 million.

Sources in the market are questioning the value that Cerberus is assigning to Gescobro, given the current market prices and its operating profit (its EBITDA amounted to €11.3 million in 2018). Nevertheless, the US fund is defending its price thanks to the high number of problem loan portfolios that the company has acquired in recent years, whose gross value amounts to more than €8.6 billion.

Specifically, Gescobro is currently managing 12 unsecured loan portfolios with a combined nominal value of €8.3 million and 2 secured loan portfolios with a nominal value of €300 million. The prices of such portfolios typically reach less than 5% and around 30%, respectively. The debt recovery firm also employs 410 workers and has agreements to manage €3.5 billion in NPLs for the main Spanish banks.

Original story: La Información (by Pepe Bravo)

Translation/Summary: Carmel Drake

Solvia Joins Forces with Orion Capital & Will Manage an Asset Portfolio Acquired from Goldman

8 April 2019 – Idealista

Solvia has joined forces with Orion Capital, which has entrusted the servicer with managing the portfolio that it purchased from Goldman Sachs at the end of last year.

The portfolio has a nominal value of €400 million and contains loans originated by CaixaBank. As such, Solvia will lead the sales process for all of the real estate assets included in the portfolio and for the properties that are recovered as solutions are found to the non-payment of loans.

Original story: Idealista 

Translation/Summary: Carmel Drake

Árima to Increase its Capital by €50M to Repay Debt & Purchase Assets

2 April 2019 – Expansión

The Socimi Árima, led by Luis Alfonso López de Herrera-Oria (pictured below), is going to carry out a capital increase of up to €50 million (expandable upon demand), which will be used to early repay a €30 million loan signed with CaixaBank, as well as to purchase new assets.

The company hopes to incorporate new investors through this operation, which will see its share capital increase by 50%, whereby providing more liquidity for its equity.

The capital increase will comprise the issue and launch into circulation of 5 million new ordinary shares with a nominal value of €10 each, which will be issued without an issue premium. It will be carried out through an accelerated placement aimed at qualifying and institutional investors.

The company’s asset portfolio amounts to €121 million, spans a gross leasable area of 29,000 m2 and includes more than 460 parking spaces in the office sector in Madrid.

Original story: Expansión 

Translation/Summary: Carmel Drake

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

Sareb Sells a €247M Property Developer Loan Portfolio

21 December 2018 – Europa Press

The Company for the Management of Assets proceeding from the Restructuring of the Banking System (Sareb) has closed the sale to an international consortium of a new portfolio of property developer loans, whose nominal value amounts to €247 million.

According to a statement issued by the bad bank, the portfolio, called Adra, groups together loans secured by properties located primarily in Andalucía, the Balearic Islands, Cantabria and the Community of Valencia.

The process was launched in June and the transaction has been undertaken in compliance with the most stringent requirements in terms of transparency and fair competition, assured Sareb.

The sale of this portfolio has received financial advice from Colliers and legal advice from Herbert Smith Freehills (HSF).

Original story: Europa Press 

Translation: Carmel Drake

Blackstone Offers €3bn+ for Santander’s Ciudad Financiera HQ

10 September 2018 – El Confidencial

Santander’s Ciudad Financiera, the operating headquarters of the bank chaired by Ana Botín in Boadilla del Monte (Madrid), is being put up for auction five years after its owner, the company Marme Inversiones 2007, owned by several investment funds, filed for bankruptcy. After an arduous legal process whereby the bankruptcy administrator and the court managing the liquidation has released the asset, the central offices of Spain’s largest financial institution have been put on the market in search of a buyer.

According to financial sources close to the process, one of the most interested parties is Blackstone, the US hedge fund that has become Santander’s largest real estate partner after it purchased half of its portfolio of toxic assets last year. The US fund is negotiating the finishing touches for the presentation of its offer for the building where the bank employs almost 7,000 employees, including the office of the President, Ana Botín. According to the same sources, Blackstone is debating whether to participate in the auction by itself or to team up with the other creditors that supported the purchase of the Ciudad Financiera in 2008.

Of those, the presence of ING, HSH Nordbank, CaixaBank and Bayeriche Landesbank stand out, which 10 years ago granted a €1.575 billion loan to Propinvest to acquire Santander’s largest real estate asset on a “leaseback” basis. Other entities also participated in that loan including Deutsche Postbank, Royal Bank of Scotland and Raffeisen Zentralbank, which in 2011 started to sell its stake in the loan to vulture funds at significant discounts on the nominal value, when the owner started to realise that it could not afford to pay the debt.

One of the players that purchased that debt was Blackstone, together with other similar funds, such as Centerbridge and Avenue Capital. According to other sources, those investors are seriously considering submitting a joint offer on 17 September, the date on which the interested parties have to appear before the judge. That date is the one that has been set for the binding offers for all of the assets to be processed. If none are received, which is unlikely, then the Ciudad Financiera will have to be split up and sold off piecemeal.

According to these sources, Blackstone is now the main candidate, after two Arab groups placed tentative offers on the table that never proved successful due to legal wrangling and the lawsuits filed by some of the creditors, such as the Iranian Robert Tchenguiz. The investor, who owns several properties in London and is known for his idle lifestyle, was another person to take advantage of Propinvest’s bankruptcy to acquire debt at low prices and whereby become a significant creditor. Nevertheless, his problems with the Law – he ended up being arrested – have ruled him out of the process to take ownership of all of the Ciudad Financiera.

Arab interest

The player that came very close to acquiring Santander’s headquarters was AGC Equity Partners, a Kuwaiti fund with €3 billion under management, which received approval from Mercantile Court number 9, which was leading the bankruptcy of Marme. But its bid, which amounted to €2.5 billion, now needs to be updated, given that, according to various sources, the debt alone of the special purpose vehicle reached €2.8 billion, including senior and mezzanine. Therefore, the offers must exceed at least €3 billion, which means that this auction is going to turn into one of the largest real estate operations of the year.

The attempt by AEG, which was suspended when Ana Botín exercised the right of first refusal over Ciudad Financiera, came at the same time as the bid from Aabar, a company from Abu Dhabi, owned by IPIC, the owner of Cepsa, now renamed Mubadala. According to those sources, that fund is no longer interested in the auction and Santander has no intention of exercising its preferential right, as acknowledged by official sources at the Spanish entity.

The main attraction of Ciudad Financiera is that Santander, which financed the first operation with a loan amounting to €304.6 million to pay the VAT on the purchase, has committed to remain as the tenant of the property for the next 40 years, which means that the rental income is guaranteed.

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

Residential Rental Specialist VBare Launches €14.1M Capital Increase

4 April 2018 – Eje Prime

VBare is pushing ahead with its business plan and is continuing to put together its perfect portfolio of assets. The company, which specialises in the acquisition of residential buildings, has launched a €14.1 million capital increase through which it is hoping to acquire new properties in the main cities in which it operates, according to sources at the real estate group speaking to Eje Prime.

“On 23 March, the company’s Board of Directors approved an increase in the share capital up to a maximum of €5,310,465.00, with the aim of continuing with its growth and investment acquisition strategy, as set out in its business plan, through the issue of a maximum of 1,062,093 ordinary shares”, explain company sources.

VBare’s new shares will be issued with a nominal value of €5 plus an issue premium of €8.30 per share, resulting in an issue price of €13.30 per share. “The total amount of the capital increase, in the event that it is subscribed in its entirety, will amount to €14,125,836.90, in other words, €5,310,465.00 as share capital and €8,815,371.90 as the issue premium”, they add.

The funds obtained through the capital increase will be used to equip the company with the capital resources necessary to continue with its expansion and growth strategy, “through the acquisition of identified real estate assets that fulfil the criteria established in the strategic guidelines, as well as allowing it access to external sources of financing with the aim of achieving the target returns”, say sources at the Socimi.

The products that the Socimi is going to consider acquiring once it has completed this capital increase include “entire buildings, portfolios of (geographically) scattered assets and portfolios of assets in the same complex, with the aim of maintaining a balanced portfolio to avoid concentration risks, and to obtain a competitive advantage over other players in the market, involving the identification of opportunities with limited competition and the achievement of below market prices”.

Moreover, the company’s roadmap involves acquiring assets with a net direct asset yield of “no less than 4%, as well as properties that it can acquire for an average discount over the market value of no less than 10% overall”.

In March, the company acquired a package of assets comprising 12 homes and a commercial property at number 5, Calle Concordia in the Madrilenian town of Móstoles, according to a report submitted by the group to the Alternative Investment Market (MAB).

Of the twelve homes that it acquired from the Eureka business group, five of them have tenants and the others are “in optimal conditions to be let out immediately”. The net yield on these assets is estimated to amount to 5.9% when they are fully occupied.

“VBare’s objectives for 2018, which it presented together with its results for last year, include, not only to generate returns from its assets when the portfolio is fully operational, but also to make investments in other cities, besides Madrid, wherever the firm expects a potential increase in rents in the short-medium term”, explain sources at the group.

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 (…) and currently manages a portfolio of 197 assets. To date, the company has analysed assets worth more than €500 million and it is constantly on the lookout for new business opportunities within the scope of its investment policy.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Testa Compensates Merlin with 4.2% of its Share Capital in Exchange for Management Freedom

27 March 2018 – El Economista

Testa is starting to go it alone. The Socimi has decided to terminate the management contract that it had with Merlin Properties, which has been in force since 2016. Following the recent incorporation of the new CEO, Wolfgang Beck, the real estate firm considers that it has the structure and staff necessary to carry out the management of its portfolio itself internally. Thus, at the last extraordinary general shareholders’ meeting, a decision was taken to cancel the contract with Merlin, which will receive new shares in Testa by way of compensation.

Specifically, Testa is going to carry out a capital increase amounting to €89 million, which the Socimi led by Ismael Clemente will subscribe to in its entirety, whereby increasing Merlin’s stake in Testa from its current level of 12.7% to 16.9%.

The rental housing Socimi notified Merlin of its decision in January. Until now, it had been receiving annual remuneration of €7.7 million for advisory and management services.

Merlin, which is Testa’s fourth-largest shareholder, behind Santander (38.8%), BBVA (26.9%) and Acciona (21%), already announced, at its results presentation, its intention to divest its position in the Socimi when it makes its stock market debut, a step that it is expected to take place between May and June this year.

Within the framework of procedures to complete prior to its stock market debut, Testa also approved the execution of a counter split of one new share for every 100 existing shares. Thus, it will give its four existing shareholders one new share with a nominal value of €1 each for every 100 shares that they currently own, which have a nominal value of €0.01 each. Moreover, the new shares will be represented by book entries.

With a workforce comprising more than 80 employees, Testa has positioned itself as the largest owner of rental homes in Spain with a portfolio of 10,702 units in less than two years.

It closed its most recent purchase last week after reaching an agreement with the BuildingCenter, the real estate subsidiary of the CaixaBank group, for the acquisition of 1,458 homes for around €228 million.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Santander & Blackstone Sign €7.3bn Loan for their Joint Venture

19 March 2018 – Expansión

Santander and Blackstone are moving forward with the creation of the joint venture that is going to hold the former real estate portfolio of Popular. The US firm controls 51% of the company’s share capital and also manages the assets, for which it has paid around €5 billion. Meanwhile, Santander retains 49% of the shares.

The joint venture is going to group together assets with a gross value of €30 billion. Within the framework of the agreement, the assets were appraised at €10 billion, the book value at which they are recorded on Popular’s balance sheet following the clean up applied by Santander.

The balance sheet of the joint venture, known as Project Quasar, is going to be backed by around €3 billion in capital to be contributed by the two partners and debt. In this sense, the company owned by Santander and Blackstone has just closed a syndicated loan agreement led by Morgan Stanley and Deutsche Bank amounting to €7.3 billion. Blackstone is also participating in the syndicate, through one of its companies, and will contribute €1 billion, equivalent to 14% of the total financing.

Conditions

The loan has been signed for a five-year term and is due to mature on 15 May 2023. The interest rate has been fixed at 1-month Euribor, with a floor of 0% and a spread of 3.15% for the first three years. From the fourth year onwards, the differential will increase to 3.25%. 1-month Euribor currently stands at -0.371%.

The loan has an initial commission of 0.8%. In turn, Santander and Blackstone must allocate 70% of their joint company’s net income to repaying the debt. According to financial sources, the price of the loan is in line with the conditions of the assets owned by Blackstone and Santander’s company. Although the joint venture’s portfolio comprises foreclosed assets and non-performing loans, the transfer of those assets to the new firm has been performed at around one-third of their nominal value; moreover, the assets have mortgage guarantees, which has allowed Santander and Blackstone to reduce the cost of its financing.

It is also worth noting the ranking that the loan has in the debt structure of the company. It is a senior liability, which means that it has collection preference over other claims. Ultimately, add the sources, it is the owners and not the banks who are going to be left with the asset risk (…).

Popular’s package of assets, included in the agreement with Blackstone is broken down as follows: €1.9 billion in properties; almost €3.2 billion in loans proceeding from real estate activity; and €4.3 billion in other types of assets linked to the property development sector, including deferred tax assets (…).

If the operation is not completely finalised by 31 March, the agreement for the joint venture may be terminated at the behest of either partner.

Original story: Expansión (by M. Martínez & I. Abril)

Translation: Carmel Drake

Nyesa Signs Non-Monetary Capital Increase of €17M with Brickstock

12 March 2018 – Eje Prime

Nyesa is continuing to win shareholders and develop its portfolio following its return to the stock market. The real estate firm has signed a contract with the Socimi Brickstock and its reference shareholders to undertake a non-monetary capital increase amounting to more than €17 million, as reported by the company to Spain’s National Securities and Exchange Commission (CNMV).

The agreement provides for the contribution of all of the shares of the Spanish companies Desarrollos Comerciales Plainet and Liber Iudiciorum. The first of the companies owns an asset portfolio comprising 2,453 m2 of retail premises and terraces in Fuerteventura, a retail premise in Barcelona, buildable land in Madrid for the construction of four homes and a buildable plot in Toledo for the construction of 52 homes. Meanwhile, Liber Iudiciorum owns two stores in the Gorbeia Multicines (Vitoria-Gasteiz) and Parque Rivas (Madrid) shopping centres, with a gross leasable area of 6,971 m2 and 4,797 m2, respectively.

For the time being, the capital increase operation is conditional upon Nyesa giving the green light to the technical, legal, tax, labour, financial and urban planning reviews of the two companies and to the shareholders of the companies accepting the valuation assigned to their shares.

The company is planning an issue rate of €0.06 per share for its capital increase, of which €0.015 corresponds to the nominal value and €0.045 to the issue premium.

Following this operation, Brickstock would hold a percentage of less than 13% of Nyesa’s share capital. Moreover, the Socimi has signed an agreement to not sell all of its shares in Nyesa for at least six months and to not sell half of its shares for at least one year.

Original story: Eje Prime

Translation: Carmel Drake