Quabit Finalises Acquisition of Enough Land to Develop Another 1,000 Homes

10 July 2019 – Richard D. K. Turner

Quabit, a listed developer controlled by the Rayet group, announced that it had acquired 105,000 square meters of buildable land, in a total investment of €21.7 million. The seven plots of land are located in the provinces of Madrid, Guadalajara, and Valencia, and are sufficient to build 550 new homes.

Next to these lands, the firm also acquired another 42,000 square meters of land, enough for 380 homes. Finally, Quabit bought a 5,760-m2 building, which it intends to renovate for another 57 flats.

Original Story: Expansion – Rocío Ruiz

Quabit Acquires Land from Sankar in Exchange for 4.55% of its Own Shares

3 August 2018 – El Español

Félix Abánades, President and largest shareholder of the listed real estate company Quabit, is continuing to immerse himself in a quagmire of capital increases that he has been promoting in order to raise funds to use to purchase land, on which to build almost 8,000 homes between now and 2022. His ambitious objective is to invoice almost €2 billion, generate a cash flow of almost €500 million and distribute €90 million in dividends.

Land in exchange for shares

Basically, these increases have been of a non-monetary nature, with the purchase of land in exchange for shares in Quabit. A much cheaper route than the two lines of credit amounting to €100 million that the firm signed with the fund Avenue between December 2016 and December 2017.

Those loans carry a clear risk, given that the principal, on which interest of between 12% and 16% is charged, must be repaid within a maximum term of 4 years following the drawdown date.

Repayment commitment

In light of the probability that the principal will not be returned on time, Avenue forced Quabit to issue warrants, an abusive right over the shares in favour of the fund that, in the worst case, would see it take ownership of 8.56% of the property developer.

For the time being, with Quabit trading at €1.77, at the close of business on Thursday, that option would be ruled out, given that the subscription prices agreed with Avenue for the execution of those rights over the shares range between €3.07 and €3.75.

Six capital increases in one fell swoop

It is for that reason that, in light of this negative outlook, Abánades carried out six capital increases in one fell swoop last November, for a combined total of €41.8 million, with the issue of shares at a price of €2, with a nominal value of €0.50 and a premium of €1.50.

All of those increases were of a non-monetary nature, in which Abánades captured estates from the Basque property developer Ondabide in Mijas (Málaga) and plots in Guadalajara contributed by Rayet, Abánades’s own company. The other four capital increases were placed by the President of Quabit with the Malaga-based property developer, Sankar Real Estate.

Agreement with Sankar

Quabit’s agreement with Sankar, for the subscription of those four increases, was aimed at obtaining plots in the Malagan municipalities of Mijas, Marbella and Estepona and in the Menorcan town of Mercadal, some in the form of proindivisos for 30% of the surface area.

The total operation will allow Sankar to acquire 4.55% of Quabit’s share capital, once the four increases have been fully subscribed. A package of 6.78 million shares, valued initially at an issue price of €13.56 million.

For the time being, Sankar has subscribed to two of these increases. With the public deed of the capital increase of the latter, relating to estates on the island of Menorca, the Malaga-based property developer has been obliged to report to Spain’s National Securities and Exchange Commission (CNMV) its stake as a reference shareholder of Quabit, given that it now owns 3% of the shares. Specifically, its stake amounts to 3.31%.

Losses of 12%

A package of 4.93 million shares that have accumulated losses of 12% compared with the €2 price for which they were issued, taking as a reference Quabit’s COB trading price on Thursday, €1.77.

The consequence of these non-monetary increases is affecting the personal stake of Félix Abánades, the President of Quabit, who has seen his position in the company decrease from 24% just a few months ago to the current level of 21.4%. He is trying to maintain the rate with the acquisition of financial instruments that, in the future, may yield another 1% of share capital.

Original story: El Español (by Juan Carlos Martínez)

Translation: Carmel Drake

Quabit Invests €455M In Land & Prepares €40M Capital Increase

23 January 2017 – El Economista

Quabit is planning to invest €455 million buying up urban land between now and 2020 and is also preparing to carry out a new capital increase amounting to €40 million.

The real estate company chaired by Félix Abánades (pictured above) has published an update to its business plan, which reflects the new financing line that it signed with the fund Avenue Capital in December.

According to the company, it will focus its purchases on land located primarily in Madrid, the metropolitan area and the Corredor de Henares corridor, as well as in other strategic areas with high potential demand, such as Cataluña, the Community of Valencia, Andalucía (with a special emphasis on the Costa del Sol) and also in regional capitals such as Zaragoza, La Coruña and Santander.

In this sense, the real estate company explains that the agreement with Avenue Capital together with its bank financing offers the company potential financing of up to €130 million in 2017 to acquire land.

On the other hand, the development and marketing of the portfolio of own assets included in the Business Plan is expected to generate cash flow of €145 million, equivalent to more than 50% of the forecast operating cash flow during the period 2017-2021.

The real estate company also said that it plans to raise another €40 million in financing “soon” through a capital increase.

Dividend payment

The Group’s Business Plan forecasts the payment of dividends, both in cash and shares, amounting to €68 million in total. “In 2016, 1 new share was distributed for every 20 existing shares through a capital increase performed in April, which represented a milestone following the interim dividend in 2006”. Thus, the company explained that “with this and the profits forecast in the Business Plan, it has set itself two objectives. On the one hand, to achieve a return on investment of more than 5% in terms of dividends and on the other hand, to triple the book value of the company.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Bankia & Apollo Go To Court Re Sale Of Finanmadrid

3 October 2016 – Expansión

Both entities are waiting for the discrepancies that arose from the sale of Finanmadrid to be resolved. The sale was completed in 2013 for €1.6 million

Fracciona Financiera Holding, the subsidiary of Apollo, filed the first lawsuit, in which it claimed €8.5 million from Bankia due to discrepancies in the sale and purchase contract based on the determination of the sales price for Finanmadrid.

The contract included clauses that have an impact on the basis of the evolution of various parameters. These conditions have been common in multiple sales operations closed in the financial sector since the outbreak of the crisis. The asset protection schemes (EPA), which cover the buyers of former savings banks, are the most visible example of these types of operations.

Bankia has responded to the lawsuit filed by Apollo, with its own claim for €6.4 million.

Finanmadrid, which used to specialise in offering consumer credit through retailers and car dealerships, has now been integrated into Avant Tarjetas, a subsidiary of Evo Banco, controlled by Apollo. Previously, it was integrated into Fracciona Financiera Holding. In the company’s accounts from last year, the audit report explains that “in the opinion of the company’s legal advisors, an unfavourable outcome from the lawsuit (with Bankia) is remote, nevertheless, the shareholder (Apollo) would financially support any contingency that may arise in the event that no provision has been recognised”.

Before the integration, Finanmadrid reduced its share capital by €2.24 million to absorb losses and so it was left at €2.79 million.

Apollo’s claim against Bankia forms part of a broad range of claims against the entity chaired by José Ignacio Goirigolzarri. In total, the bank faces claims amounting to €390 million, not including the claims relating to its debut on the stock market and the sale of its preference shares.

Claims

The largest claim, amounting to €165 million, is one presented by ING Belgium, BBVA, Santander and Catalunya Banc against Bankia, ACS and Sacyr. (…).

The construction group Rayet also claims €78.2 million from Bankia for what it considers are accounting irregularities and for differences in the valuation of plots of land linked to the debut of Astroc on the stock market in 2006, an operation piloted by the former Caja Madrid.

The bank has 305 legal proceedings open relating to derivatives with claims amounting to €38.8 million.

Original story: Expansión (by E. del Pozo)

Translation: Carmel Drake

KKR Acquires 5.34% Stake In Quabit Worth €6.8M

28 December 2015 – Valencia Plaza

KKR has acquired a 5.438% stake in the share capital of Quabit Inmobiliaria, a percentage that it has obtained by subscribing to part of the capital increase recently performed by the company. Its stake is worth €6.8 million on the basis of current market prices.

The US fund thereby becomes a key shareholder of the company that is controlled and chaired by Félix Abánades (pictured above) through Rayet, the company that has seen its stake in Quabit diluted from 29.2% to 21.2% following the capital increase. Meanwhile, Martibalsa, the other main shareholder now holds an 11% stake.

Through this operation, KKR reinforces its commitment to invest in Spain and increases the range of sectors in which it operates in the country to include real estate.

Specifically, the fund has acquired 136.29 million shares in the company Quabit Inmobiliaria through the capital increase that the company completed two weeks ago, a shareholding equivalent to 5.34% of its capital, according to the registers of Spain’s National Securities Market Commission (CNMV).

Growth

KKR has become a shareholder of the real estate company at a time when it is embarking upon a growth phase, with the launch of a new strategic plan to 2020.

The plan involves a total investment of €470 million and focuses on the development of land in Madrid, Barcelona, Valencia and the Costa del Sol, as well as in other areas that it considers have “potential housing demand”.

Thus, it expects to deliver around 3,000 homes over the next five years and exceed the turnover threshold of €1,000 million by 2020.

Original story: Valencia Plaza

Translation: Carmel Drake

What Has Become Of The Property Kings?

23 April 2015 – Expansión

The individuals that owned the large real estate companies during the boom years have suffered from sharp drops in sales and in the value of their assets. The largest has filed for bankruptcy and is now at the mercy of its creditors.

The largest land owner in Spain. The largest real estate company in Europe. Those are some of the descriptions that were used to refer to the large Spanish real estate companies almost a decade ago. At their respective helms were businessmen such as Luis Portillo, Rafael Santamaría and Joaquín Rivero (pictured above, left). As such, they were some of the hardest hit by the burst of the real estate bubble in 2007. After generating revenues of hundreds of millions of euros from the sale of homes, these companies and their managers were unable to cope with the high levels of indebtedness that they had accumulated during the boom years, and so found themselves in precarious situations.

But they are not the only ones who suffered from the effects of the sudden change in the sector. Rivero, a businessman from Jerez, is still dealing with the consequences of his stint at Metrovacesa, fighting a hard battle in the courts against his former partner, Román Sanahuja (pictured above, right), regarding the separation process that resulted in Rivero ending up with Gecina and his former partner with Metrovacesa. Sanahuja’s inability to pay the debts of his family business, Sacresa, meant that he lost control of Metrovacesa to the banks in 2010.

Another company that grew from strength to strength during the boom was Afirma (now Quabit). The company was created from the merger of the former entity Astroc, controlled by Enrique Bañeulos, Landscape and Rayet, a company led by Félix Abánades. After various refinancing processes, the businessman from La Alcarria managed to move forward with the listed real estate company Quabit. However, the same thing did not happen with its parent company, the construction group Rayet, which is now trying to exit from its bankruptcy process.

Francisco Hernando, known as El Pocero, was another one of the most well-known developers. Hernando developed a residential estate in the town of Seseña (Toledo), where he was planning to construct more than 15,000 homes. In the end, just under 5,000 homes were built; 3,000 of those ended up in the hands of the creditor bank as Hernando was unable to pay his debts.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake