Realia’s Profits Drop By 91% To €5.2M In Q1

9 May 2017 – Expansión

Realia closed the first quarter of the year with a net profit of €5.2 million, which represents a decrease of 91%, due to a sharp drop in the firm’s extraordinary income.

The real estate company controlled by the businessman Carlos Slim said to the CNMV that, during the first quarter of 2016, its profits were favoured by the positive financial result of €51.2 million, due to discounts on its first three payments of residential debt.

As such, if we exclude the positive impact recorded in 2016, the recurring net profit would have increased during the first quarter of this year by 16.9%.

The company obtained turnover of €23.3 million, down by 8.6%, due to a 20.8% decrease in property sales in the residential segment. The company completed 21 units during the quarter for a total amount of €4 million, compared with 27 for €5 million during the same period last year.

By contrast, rental income from the real estate business increased by 4.5% during the period, to €14.9 million.

In terms of indebtedness, Realia decreased its net financial debt by €187 million during the last year, to reach €738 million as at 31 March 2017.

Moreover, following the end of the quarter, Realia Patrimonio signed a new syndicated loan with the banks amounting to €582 million and cancelled its previous syndicated loan signed in 2007, as Expansión revealed on 27 April.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Santander & Bankia Join CaixaBank In €700M Loan To Realia

6 February 2017 – Expansión

The process to negotiate the refinancing of Realia is still underway. In the latest development, Santander and Bankia have announced that they will join CaixaBank in a new syndicated loan, amounting to around €700 million, which will allow the Spanish real estate company, which is controlled by the Mexican businessman Carlos Slim, to pay off its existing debt.

In this way, in addition to Caixabank, which will lead the new loan for the subsidiary Realia Patrimonio, Santander and Bankia have approved this operation. They are now looking for three more banks to join the agreement, since the idea is that six financial institutions will comprise the new syndicate, according to sources familiar with the process.

To this end, the coordinator has made contact with around thirty banks, including most major banks in Spain, as well as some foreign entities that have headquarters in Spain, such as ING, Crédit Agricole, Société Générale, Deutsche Bank, Aareal Bank and Natixis. Financial sources indicate that the players most interested in joining the process are Abanca, Sabadell, Bankinter and Popular.

The sales document containing the results of the due diligence was published on Thursday and it is hoped that the loan contract will be signed in April, which is when the real estate company’s existing debt, amounting to €680 million, is due to expire. CaixaBank engaged Deloitte in December, on behalf of the other financial institutions, to perform a feasibility analysis of the group’s properties, as well as a comprehensive due diligence; meanwhile, the law firm Uría will be responsible for drafting the new syndicated loan financing contract.

The negotiations to agree the terms of a new syndicated loan form part of the firm’s objective to fulfil its financial viability plan and reduce its level of indebtedness.

In April 2007, Realia Patrimonio carried out a restructuring of its financial debt by subscribing to a syndicated loan with two entities – Caja Madrid and Banesto. They subsequently assigned some of their exposure to 14 others entities, whereby taking the total number of FIs in the lender group to 16, for an initial maximum amount of €1,087 million, and Realia has been paying off the balance ever since. Moreover, these entities have since transferred some of the debt to other companies.

Within the framework of this strategy, at the end of 2015, Realia signed a refinancing agreement with the debt-holding entities of its residential activity – another one of the company’s business lines – whose capital pending repayment amounted to more than €800 million.

Following the restructuring of the residential business debt and after incorporating the debt outstanding on the participation loan that Inversora Carso purchased from Sareb, Realia’s gross financial debt position stood at €941 million at the end of Q3 2016, down by 46% compared to the same period in 2015.

Original story: Expansión (by R.Arroyo)

Translation: Carmel Drake