Tag: refinancing agreement

Proinsa: The Final Piece of Reyal Urbis’ Empire Files for Bankruptcy

12 February 2018 – El Confidencial

Proinsa, Promotora Inmobiliaria del Este, has filed for creditor bankruptcy. The company is chaired by Rafael Santamaria, who, together with Joaquín Rivero, Enrique Bañuelos, Luis Portillo and Manuel Jove, were the property “lords” of the last real estate boom. Santamaría was also the President of Reyal Urbis, which starred in the second-largest dissolution ever of a real estate company in 2016, after that of Martinsa Fadesa.

Specifically, Reyal Urbis, which filed for its own creditor bankruptcy last summer, controls 70% of the company Proinsa, which is also dedicated to real estate development. Moreover, the two firms share a registered address on the Madrilenian street of Calle Ayala, just 50m from Paseo de la Castellana, where Rafael Santamaría Trigo, who also used to serve as the President of the Property Developers of Madrid (Asprima), used to have his office.

Last week, Mercantile Court number 1 of Madrid declared that Proinsa had filed for bankruptcy with a debt of almost €62 million and assets worth around €57 million, after it had withdrawn from a refinancing agreement in the middle of December 2016. In fact, that company’s short-term debt amounts to €34 million, of which €10 million corresponds to debt with various financial institutions and €21.5 million to Sareb. On the other hand, it has short-term debt amounting to €21.6 million with group companies. Moreover, at the end of 2016, the firm’s losses amounted to €1.1 million, and it held negative equity of almost €5 million.

In addition to Reyal Urbis, the firm’s minority shareholders include several companies from Burgos that form part of the same group: Inmobiliaria Espolón, Promotora Fuente Redonda, Grupo Río Vena Gestión de Obras and Alqlunia 2.

Proinsa held onto just one asset: a plot of land under development in Los Berrocales, one of the developments in the southeast of Madrid that was blocked by the Town Hall of Madrid fifteen days ago. Specifically, it owned 75% of an estate (La Fortuna) with a fair value of €57.1 million at the end of 2016, according to a valuation performed by Knight Frank. A single syndicated mortgage loan was secured over that estate from Sareb, Banco CEISS, Banco Mare Nostrum, Ibercaja and Unicaja, and with EBN Banco de Negocios acting as the agent bank. That loan was constituted in December 2006 and was subsequently novated on three occasions until the end of 2014. Moreover, in terms of unforeseen costs, Proinsa owed €6.5 million to the Compensation Board of Los Berrocales.

Almost half a century dedicated to real estate

The real estate businesses of the Santamaría family date back to 1970. As Nacho Cardero recounts in his novel “The Property Lords”, Reyal Urbis was constituted in March of that year by the current Chairman’s father, Rafael Santamaría Moreno, owner of the Layer Farm in Pinto, dedicated to the wholesale of eggs. “The laying hens were exchanged for cranes and the company turned the company on its head, changing its name to Reyal, which is Layer written backwards”.

The small construction firm would become one of the largest property developers in the country, after it purchased Urbis from Banesto in July 2006 for €3.3 billion, at the height of the real estate boom (…).

Until last week, Proinsa was the final piece at the base of that real estate emporium. And that final piece in the house of cards left many cards along the way, such as the ghost city of Valdeluz, just 67km from Puerta del Sol, in the province of Guadalajara and another symbol, alongside Seseña (Toledo) (…) of the excesses of the real estate party (…).

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

Room Mate Prepares To Enter Holiday Hotel Segment

18 October 2016 – Expansión

Room Mate Hotels, the hotel chain chaired by Enrique Sarasola (pictured above), is preparing to enter the vacation hotel segment and has set itself the goal of having 2,000 rooms in a number of hotels along the coast by 2020.

Specifically, the group founded in 2005, which already has a presence in twelve cities and six countries, plans to inaugurate this new line of business next summer. To that end, the chain is currently analysing different projects and studying operations in the Balearic Islands, Canary Islands, Cataluña, Costa del Sol and Riviera Maya (México).

“We have taken this decision after listening to requests from our customers, who have been asking us for a long time now to take our philosophy and creativity to beach destinations”, explained Sarasola.

The Director said that the group currently has around fifteen projects on the table at various phases of analysis to determine whether they fit with its standards. “The company is being refinanced. This step forms part of our strategy to grow through turnkey projects”, he added.

The chain signed a €54 million refinancing agreement with Citigroup at the end of last year. Half of that figure will be used to pay off debt and the remainder will be used to finance growth.

The Chairman of Room Mate considers that this move is an important step in the company’s plans: “We want to take the essence of Room Mate to exclusive vacation destinations, specifically: excellent locations, superb design…and innovative concepts”.

In this way, the group’s new beach front destinations will include a wide range of leisure facilities, bars, restaurants, beach clubs and terraces, said Sarasola. “In some locations, we will opt for all inclusive formats, in others we will place the emphasis on the music or on the leisure facilities”, he said.

According to the company’s forecasts, Room Mate will close 2016 will operating revenues of €72 million, which represents an increase of 36% with respect to 2015 (€52.9 million). In the first eight months of this year alone, the hotel chain recorded revenues of €44 million.

Room Mate’s properties will close the year with an occupancy rate of more than 87%, whislt the RevPar (revenues per available room) will amount to €133.42, up by 14% compared to last year.

Room Mate Hotels has more than 1,500 rooms in 23 hotels and plans to open another eight establishments over the next few months.

Sarasola said that the chain has achieved record results in all of its destinations this summer, with the exception of Istanbul, which has suffered as a result of the terrorist attacks. “We are not planning to abandon the destination. We are not going to allow terrorism to change our plans”, he said.

Renovation

In Spain, the Director encourages the Public Administrations to help the sector to renovate the hotel stock…to position Spain as the “Florida of Europe”. He also acknowledged that the lack of Government “is not good for the industry”.

The Executive recently strengthened his commitment to Room Mate by buying an additional 20% stake in the hotel chain that he founded more than ten years ago; he now controls 70% of the share capital. The remaining 30% is held by Sandra Ortega Mera, through the company Rosp Corunna.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

San José Will Surrender 35% Of Its Capital If It Fails To Repay Loan

25 June 2015 – Bolsa Manía

San José will surrender shares representing up to 35% of its total capital to a group of six banks to repay a €100 million loan, in the event that it fails to repay said loan before its maturity date in October 2019.

The entities that have signed this loan agreement are: Banco Popular, Barclays Bank, Bank of America Merrill Lynch, Deutsche Bank, Sareb and KutxaBank.

To this end, San José’s shareholders’ meeting has approved the issue of “warrants” in favour of these entities. These warrants are securities that include the option to subscribe to shares in the company to offset any debt.

The loan linked to these warrants is one of the tranches that San José restructured after it reached a refinancing agreement at the beginning of the year. This agreement already required the surrender of its entire real estate division to the banks to repay the majority of its liabilities (€1,329 million).

The rest of the debt (€297 million) was divided into three tranches, one of which provides for the repayment of the liability in the event of non-payment of the loan on the maturity date, in four years time.

San José subjected its refinancing agreement to a judicial homologation process, in order to extend the agreement, reached with the majority, to all of its creditor entities.

Thus, Sareb and KutxaBank are included in the agreement and will have “warrants” even through they rejected the restructuring agreement, according to the shareholder documentation provided by the construction, services and renewable energy group.

New growth phase

In its presentation to shareholders, San José said that this refinancing agreement adapts the maturity dates to the cash flow streams and provides the company and its subsidiaries with sufficient financing lines to properly perform their activity and embark on the new growth phase.

The company highlighted the increase in its international business, which now accounts for more than half (59%) of total revenues, and the prevalence of its non-residential construction works, which dominate 87% of the business.

The shareholders of the company led by Jacinto Rey also agreed to appoint José Manuel Otero Novas as an external director of the company.

Original story: Bolsa Manía

Translation: Carmel Drake