Tag: PROPERTY COMPANY

Realia Appoints Gerardo Kuri As Its New CEO

13 October 2015 – El Mundo

Realia has appointed a new CEO in the form of Gerardo Kuri, one of the real estate company’s directors, as a representative of its majority shareholder, Carlos Slim.

Kuri is also a director of FCC and Cementos Portland, the real estate subsidiary where he is also the CEO. Similarly, he has been performing CEO functions at Inmuebles Carso, the real estate division of businessman Slim’s conglomerate, since 2010.

Realia appointed its new CEO after appointing Julio Rodríguez Torres, also a close advisor of Slim, as the new non-executive Chairman.

Rodríguez Torres and Gerardo Kuri take over from Ignacio Bayón and Íñigo Aldaz, as the Chairman and CEO of Realia, respectively. The former is going to retire and the second recently resigned from the post.

Realia is restructuring its board and governing bodies after Slim took control of the company in June 2015 – he won the takeover war waged during the first half of the year with Hispania, a company in which George Soros holds a stake. After that takeover process, the Mexican businessman secured control of the company, since he added the 25.1% stake that he then acquired in the company to the 36.8% stake already held by FCC.

Realia, whose share prices has risen by 53% on the stock exchange so far this year, owns property covering 419,000 m2, worth around €1,400 million, including the Torres Kio in Madrid. Its residual housing and land business comprises a portfolio of land with a surface area of 1.87 million m2 and a stock of 650 homes.

Original story: El Mundo

Translation: Carmel Drake

Slim Appoints Trusted Advisor As Realia’s Non-Exec Chairman

7 October 2015 – Cinco Días

The tycoon Carlos Slim is starting to introduce his own people into the real estate company Realia. Yesterday, he appointed two new members to the Board of Directors, including Juan Rodríguez Torres, who will serve as the non-executive Chairman.

Slim controls the property company, which was founded in 2000 with assets from Bankia and FCC, through his company Inmobiliaria Carso.

He took control after purchasing a 24.9% stake in the share capital from Bankia at the beginning of this year. Moreover, he indirectly controls 36.88% of Realia’s capital through his majority shareholding in FCC.

The new Chairman is a man who Slim trusts completely. The two men are the same age (75) and both studied Civil Engineering at the Universidad Nacional Autónoma de México. They have also served together as directors on the boards of several companies owned by Slim, the second richest man in the world, according to Forbes. Rodríguez takes over from Ignacio Bayón, who has held the post since Realia was constituted and who is now retiring.

Several other changes were communicated to the CNMV, including the resignation of Iñigo Aldaz, the CEO – Slim has not yet revealed who will take over his role.

Realia is restructuring its Board of Directors after Slim won the takeover war that was waged with Hispania, in which George Soros holds a stake, to take over the control of the real estate company in June.

The company also appointed the Mexican CEO of FCC, Carlos Jarque, as a member of the Board of Directors of the construction company.

Moreover, Alicia Alcocer Koplowitz and Esther Alcocer Koplowitz will continue as members of the Board, in their capacity as representatives of FCC. Meanwhile, Gerardo Kuri, Slim’s key man at Cementos Portland, also controlled by the tycoon, will enter as a shareholder-director.

Improvement in Realia’s asset value

Meanwhile, the company also reported that it has established a new accounting policy whereby the valuation of its assets would have increased from €912 million as at 31 December 2014, when they were valued at acquisition cost, to a fair value of €1,399 million. “The impact of this measure on the company’s own funds, at the consolidated level, would have been an increase of approximately €367 million”, said a source at the company.

According to Realia, through this decision, the company is bringing itself in line with the standard practices of the main listed real estate companies in Spain. They are also improving the transparency of the communication of the company’s value to the market, since the fair value method, endorsed by an independent expert, more adequately reflects the value of the assets of real estate companies.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Santander Will Bring Metrovacesa To Profit For The First Time Since 2007

31 August 2015 – Expansión

THE COMPANY EXPECTS TO GAIN 20.2 MILLION IN 2015 / The bank increases its commitment to a property company, that is being reborn from the ashes, with the purchase of 13.8% stake from Sabadell for about 130 million.

Santander believes Metrovacesa can recover to being one of the leaders in the Spanish real estate. For this reason,it just increased its commitment to the company, with the purchase of 13.8% of its holding by Sabadell, “for an amount of one euro per share,” according to sources familiar with the operation, which amounts close to 130 million, an operation advertised by EXPANSIÓN on July 23.

With this new acquisition, the bank headed by Ana Botin will have 72.5% of the capital. In fact, the shareholding will be shared only with BBVA, which has 19.4%, and Popular, which holds 7.9%. The agreement between Santander and Sabadell comes just six months after a similar operation between Santander and Bankia, when the 19.07% stake in Metrovacesa was bought. Bankia, which had to free itself from all its holdings received 100 million euros for its share.

Strategic plan

Santander trusts, therefore, in the revival of the Spanish real estate company, currently chaired by Rodrigo Echenique, vice president of the bank since 6 May. According to the strategic plan of Metrovacesa for the period of 2015-2020, to which EXPANSIÓN has had access, the company expects to earn 20.2 million euros this year, mainly due to the sale of assets. This would mean the end of a negative streak since 2008, when its losses began.

In fact, last year, it earned revenues of 134.9 million euros compared to 104 million in the previous year. In this period, the company recorded a loss of 185 million compared to 349 million in 2013. “The company has potential in the medium term. That’s why Santander bet on it before, certainly, reselling it. With a package already above 70%, it could attract other real estate operators, such as mutual funds, “noted financial sources.

However, the same sources indicate that to accomplish this business plan, “it is likely that new cash injections will be needed.” For now, the company has already begun to work on new projects such as development of housing, hotels and shops, in the old Clesa factory in Madrid.

To December 31, Metrovacesa had some assets valued at 4,8 billion euros, which included almost 1 billion in land and residential product. This part of the assets may exit the company’s portfolio.

On the other hand, the company faces a major debt restructuring, amounting to 2,4 billion euros. For this it has hired Goldman Sachs. In fact, the debt that was included in the Sabadell’s sales package, of about 300 million euros, was also counted in this process.

Restructuring

The efforts to reduce the liability and make the company viable have been constant. In May 2013, when Metrovacesa was delisted from Exchange, it’s worth amounted to 5 billion. But it has already carried out three processes of restructuring. After refinancing in early 2014, Metrovacesa divided its syndicated loan into two sections. The first one, called Tramo (Segment) A, was reduced by 80%, to 213.9 million euros, with revenues generated from the sale of Gecina (obtaining 1.546 million for its 26.67% in this French real estate company).

In the case of Tramo B, Metrovacesa repaid in advance 651 million, a deal that included a debt reduction of 156 million euros, as recorded in the latest company report. This transaction, closed on January 20, was completed in April when three of the four shareholding banks, BBVA, Santander and Sabadell, canceled this credit after conducting a capital increase of 751 million euros.

Original story: Expansión

Translation: Lee La