Isolux Agrees To Sell Its Parking Lots To Oak Hill

5 June 2017 – Expansión

On Friday, Isolux took some important steps in its plan to reduce to the maximum the damage caused by its delicate corporate situation. On the one hand, the company’s Board of Directors, chaired by Nemesio Fernández-Cuesta, formulated the accounts for 2016, which saw it record losses of €1,332 million, after the entity recognised provisions and adjustments amounting to €2,853 million.

On the other hand, the company reached a preliminary agreement with the investment fund Oak Hill to transfer it the entire car park business. Sources at the company indicated that the investor held an option to execute a loan of up to €100 million granted in 2015. In theory, Oak Hill’s option was limited to, approximately, half of the business of Isolux Aparcamientos. However, the company and fund have reached an agreement for that option to be extended to include 100% of the subsidiary, in an operation that could see Isolux record revenues of €10 million and deconsolidate debt of €200 million.

The Spanish group first closed an agreement with the fund Oak Hill Capital Partners to jointly develop the business back in 2015. The investment fund undertook to inject €100 million into the company, in the form of a loan allocated entirely to expand the portfolio of assets. In exchange, Isolux granted Oak Hill an option to acquire a stake in the car park subsidiary from 2019 onwards.

Oak Hill’s arrival in 2015 ended a period of uncertainty for this branch of Isolux’s activity, which had been declared available for sale after other attempts to form strategic alliances had failed. At the beginning of 2013, the Spanish group signed a preliminary agreement with the French fund Edifice Capital to invest €150 million between 2013 and 2014. The resources were going to be used to purchase new car parks, with the aim of reaching 50,000 rotating spaces. However, in a surprise move, the French firm did not keep its word and withdrew from the project.

In the meantime, Isolux is pushing ahead with the rest of its divestments, the most high-profile of which is its exit from the transmission lines in Brazil.

On Friday Isolux approved the accounts for 2016, after postponing their formulation on four other occasions, and it did so to coincide with the new process that has been launched to restructure the group and avoid bankruptcy. “The Board of Directors considers that, with the right financial support, Isolux constitutes a viable business project,” said the Board of Directors of the company, which needs new funding and credit lines to ensure its survival.

Feasibility plan

Sources at the company indicate that the auditor, PwC, has not included any qualifications in its report, but that it has included paragraphs to emphasise the link between the operation of the company and the success of Álcarez & Marsal’s feasibility plan. This plan involves segregating the engineering business from the other LoBs and looking for a partner to inject money into the new company, with a portfolio of healthy contracts worth around €1,000 million. The solution requires the support of the plan’s current creditors/shareholders. The group is waiting for a response from Bankia and CaixaBank.

Original story: Expansión (by C. Morán)

Translation: Carmel Drake

Sareb May Exchange Its €57.5M Debt In Realia For Shares

20 May 2015 – El Economista

Sareb may have the option to enter the share capital of Realia, with a maximum stake of 4.5%, through the exchange for shares of the equity loans (€57.5 million) that it holds with the real estate company.

Realia will request authorisation at its next shareholders’ meeting to undertake the necessary capital increases in the event that the ‘bad bank’ decides to perform the operation.

It will undertake two capital increases, one amounting to €29 million and a second amounting to €28.9 million. In both cases, it will issue around fourteen million new shares at €2 per share, a price that almost triples (+185%) the current share price of the real estate company.

Shareholder

In this way, Realia will give the ‘bad bank’ another year to exercise its option to become a shareholder of the company. The institution will consider this possibility at a time when Realia is subject to two takeover bids (OPA), one by the Socimi Hispania and the other by the businessman Carlos Slim.

These bidders are waiting for Spain’s National Securities Market Commission (CNMV) to approve the second bid so that the acceptance period may begin.

Sareb’s equity loan in Realia was granted in September 2009, when the real estate company signed a €100 million loan agreement with its two then partners (FCC and Bankia), which each contributed 50% of the balance. FCC then exchanged its entire loan balance for shares in the company, converting it into the majority shareholder, with a stake of 36.8%, which it has already said it will not sell under either of the takeover scenarios.

Meanwhile, Bankia, which currently has an agreement to sell its 24.9% stake in Realia to Carlos Slim, transferred its share of the loan to Sareb in December 2012. The entity has not yet made any decision about the eventual conversion. Nevertheless, the financing is due to expire in 2016.

Of Sareb’s total loan amount, one tranche amounting to €29 million is “freely convertible” in nature, whilst the second tranche, amounting to €28.58 million, is “not freely convertible”, which means that the institution will have to decide between capitalising it or accepting a discount.

Slim’s arrival

Another item on the agenda at Realia’s shareholders’ meeting, which will be held on 22 June, is the ratification of the appointment of Gerardo Kuri as a Director – he is currently the Director General of Real Estate at Carso, one of Slim’s companies, as well as a Director of FCC and the CEO of Cementos Portland.

Slim appointed this spokesman and positioned him on Realia’s board, after he became the primary shareholder of FCC and that group decided to continue as a partner of the real estate company, but just days before the Mexican businessman launched his takeover bid for the company.

Realia will also ask its shareholders for approval, if they deem appropriate, of an increase in its share capital by up to half of its current size and to issue debt securities for a period of up to five years and for a maximum amount of €450 million.

Original story: El Economista

Translation: Carmel Drake

Hispania & Barceló Sign Binding JV Agreement

14 April 2015 – Press Release

After the successful completion of the due diligence process and in accordance with the agreed plan, Hispania Activos Inmobiliarios, S.A. has communicated to the Spanish Stock Market Regulator, CNMV, that its 100% subsidiary company, Hispania Real SOCIMI, S.A.U., and the Barceló Group have signed an agreement to define the terms of their joint venture, which has been established to allow the two companies to continue investing in hotel resorts in Spain. The terms of the agreement respond to those set in the framework agreement dated 24 February 2015.

According to Concha Osácar, Board Member of Hispania, “signing this agreement implies the formalisation of an investment that will be key for Hispania, considering the significant cash flow generation expected from the vehicle in the short term.”

According to Raúl González, CEO for EMEA at Hoteles Barceló, “this agreement will be key to enabling growth in the most important tourist areas in Spain”.

The main aspects of the agreement signed between Hispania and Barceló

On 24 February 2015, Hispania and Barceló announced a framework agreement for the creation of a JV, through which Hispania will acquire 11 hotels (3,946 keys) and 1 small shopping centre during the initial phase, with the option to acquire 5 additional hotels (2,151 keys) along with a second small shopping centre at a later date.

Once this transaction has been completed and the option for the 5 additional hotels has been exercised, Hispania will have invested circa €340 million, to obtain an 80.5% stake in the new joint venture. Grupo Barceló will maintain a 19.5% stake, with the option of acquiring up to 49% through future capital increases.

Barceló will continue to operate the hotels, which have been acquired by means of lease contracts for an initial period of 15 years.

The agreement signed by Hispania and Barceló will allow the JV to launch its ambitious plan to increase the portfolio of the new REIT, by means of acquisitions or further asset contributions. The goal is to, at least, double the size of the portfolio, creating a Spanish resort hotel portfolio with assets managed by diverse leading operators in this market.

Original story: Press release

Edited by: Carmel Drake