Tag: real estate company

Reyal Urbis Offers Its Banks 20% Of The Debt It Owes Them

13 February 2015 – Expansión

The listed real estate company Reyal Urbis will submit its payment proposal today to allow it to overcome the bankruptcy process in which it has been immersed for two years now.

The real estate company controlled by Rafael Santamaría will offer its creditors, which include entities such as Santander, Banco Popular and RBS, as well as Sareb and ICO, a haircut of 80% of the debt and the payment of the remainder through the transfer of assets.

The real estate company filed for bankruptcy in February 2013, after a string of up to four refinancing processes. According to the bankruptcy report, the company has a debt of €3,978 million, an equity deficit of €2,878 million and assets amounting to just €1,474 million. After selling off various iconic assets, such as the ABC Serrano and Castellana 200 shopping centres, both in Madrid, and the Diagonal Port Hotel in Barcelona, Reyal and its creditors have been working together to distribute the rest of its assets, in the form of lots, which will be awarded through a draw.

The tax authorities

The proposal for an 80% haircut will not apply to all of the creditors, since the real estate company will propose a different offer to the Tax Authorities.

Reyal Urbis will offer to pay the Public Administration the full amount it owes in cash (€400 million) over the long term, say sources close to the process.

Creditors have until 13 March to accept or reject Reyal Urbis’ proposal. If it does not obtain the agreement of the entities, the real estate company will end up with a small lot of assets and a manageable debt.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Hispania Continues Takeover Bid For Realia Despite FCC’s Withdrawal

12 February 2015 – El Economista

The company, owned by Soros and Paulson, does not intend to increase its bid.

Hispania is continuing with its plans to buy Realia, the real estate company owned by Bankia and FCC, even though the construction company has decided not to sell its 36.88% stake.

The company, whose main shareholders are the business tycoons George Soros (pictured above) and John Paulson, announced a voluntary takeover for 100% of the real estate company at a price of €0.49 per share; and sources close to Hispania have confirmed to El Economista that they are going to proceed without making any changes to their offer. “The process is advancing normally, they are waiting for the CNMV to approve the prospectus and then they will launch a takeover bid with the same conditions as the one already announced”.

The company, which is managed by Azora, took this decision after holding a meeting to discuss the new situation following FCC’s withdrawal.

The group, controlled by the Mexican Carlos Slim, explained through a notification to the CNMV that “the decision reflects the fact that we are reviewing our investment and divestment plans, following the (capital) increase, which allowed us to strengthen the Group’s equity and financial situation”. Moreover, Slim, who took on a controlling stake in the construction company as a result of the (capital) increase, is also evaluating the legal options that would allow him to purchase Realia through one of his other companies.

Below market price

Hispania’s offer was never well received by the market, as it was considered to have offered a knock-down price for the real estate company, at 28% below Realia’s list price. Now, following FCC’s announcement, the situation is more complex, as Hispania needs its offer to be approved by 55% of its shareholders.

Besides the construction company, Realia’s second largest shareholder is Bankia, which controls 24.95%. The entity is under an obligation (having been mandated by Brussels) to sell its industrial holdings, however, it still has a margin of two years remaining to undertake these divestments.

Original story: El Economista (by Alba Brualla and Virginia Martínez)

Translation: Carmel Drake

FCC Suspends Sale Of Realia And Threatens Hispania’s Takeover Bid

6 February 2015 – El Confidencial

Carlos Slim’s impact on FCC is starting to be noticed. The new majority shareholder of the infrastructure group has laid his cards on the table and has decided to officially suspend the sale of the 36.886% stake FCC holds in Realia, a decision that threatens the takeover bid (OPA or public offer for the acquisition of shares), launched by Hispania for the real estate company, whose prospectus is pending approval by the CNMV – Spain’s National Securities Market Commission.

The other major shareholder of Realia, Bankia, which owns 24.9% of the capital, is standing by its decision to sell, despite the change in its partner’s position. This leaves the floodgates open for a war to seize control of the company, which owns desirable assets such as one of the KIO towers.

The market has known that this scenario could arise since the beginning of the year, during which time Realia’s shares have soared by more than 40%, from the price of €0.51 per share at the end of the year, in line with Hispania’s offer, to reach the current price of €1.30.

The pieces in this game of chess are placed in the perfect position for a wave of strategic moves to be unleashed. Hispania has the upper hand in that it holds an exclusive agreement with Realia’s creditor funds, a deal that may be extended for the whole of 2015, even if the takeover bid that is currently underway were to fail.

Fortress, King Street and Goldman Sachs are Realia’s preferential creditors with a debt of €793 million, from which Hispania has successfully negotiated a haircut of €167 million. This saving allowed them to launch their takeover bid at €0.49 per share. In addition, the funds have exempted Hispania from an onerous clause that obliges any potential buyer to liquidate their debt within a period of five days.

Against this competition, Slim has his own upper hand: he is free from this clause, since it is only applicable when a change of control occurs and, if the player that enters the arena is FCC itself then there would be no such change of control, since the infrastructure group has always held the reins of Realia, which is widely known as its real estate subsidiary.

This means that the Mexican tycoon now has several options on the table: from waiting and seeing whether Hispania’s takeover bid fails and then entering the fray; to starting to negotiate a new transaction with Hispania and its associated funds; to starting an operation with new players, since Bankia is determined to sell and if Hispania’s takeover bid does not going ahead then it will open a new process to close the sale.

The Socimi (Hispania), meanwhile, has conditioned the success of its bid on taking over 55% of Realia’s share capital. In fact, in an ideal world, Hispania would take control of the smallest number of shares possible, above this threshold, to enable it to take full control of the real estate company for the lowest price possible.

From this point of view, both the 24.9% stake that Bankia has put up for sale and the almost 13% stake that Sareb holds (through the debt associated with the former stakes held by Lualca and Prasa, which controlled 9.5%) are key, as well as the participation loans that should be exchanged from this month onwards and which would allow it to takeover another almost 3%.

Meanwhile, Slim’s initial plans do not include the option of launching a counter-bid, or of establishing bilateral negotiations with Bankia, since that entity is obliged to undertake all of its sales in concurrent processes. But that would not be an impediment if Hispania’s bid fails and the entity launches another sales process, since the Mexican would enter the bidding.

In any case, only an official announcement, through a significant event with the CNMV, to suspend the sale of its stake in Realia would go against the interests of the Socimi, because Realia’s list price is well above the price of the takeover bid, which in theory discourages minority shareholders from accepting the offer, above all, when they also know that the world’s third richest man is also interested. And Slim certainly has acccess to credit.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake