Hispania To Invest €650M Ahead Of Company Sale In 2020

3 May 2017 – Expansión

Hispania is getting ready to embark on a new phase. The Socimi in which George Soros owns a stake wants to update its hotel portfolio, by purchasing new assets and reposition its existing properties, with the aim of preparing the company for sale, which must happen before March 2020 – the date on which the company will celebrate its sixth anniversary of trading on the stock market.

The company plans to invest €400 million in new hotel acquisitions, which it will undertake, for the most part, before September, including an establishment in Mallorca with 250 rooms that is expected to be completed soon and which will turn it into the largest hotel owner in Spain and the third largest group in Europe behind Pandox and Foncière des Murs.

The group has 38 hotels and 11,000 rooms. The gross asset value (GAV) of its hotel portfolio amounts to €1,257 million, according to the most recent valuation performed by CBRE.

Similarly, the company will spend €250 million on the repositioning and renovation of its portfolio. This investment effort will be undertaken primarily in 2018. The group will finance this investment using its own capital and through debt.

In this way, the managers seek to have Hispania ready by the first quarter of 2019 to prepare it for its sale. The Socimi is considering selling off the whole company – excluding its offices and homes – through a transfer of control, rather than by selling off the assets individually or in batches.

The entry of Soros into the group’s most senior management body, following the incorporation of Benjamin D. Barnett, analyst at Soros Fund Management UK Management LLP, into the Board, will facilitate contact with international investors interested in the company, according to sources in the market.

In addition to its hotel portfolio, the Socimi managed by Azora also owns 27 office buildings, worth €520 million and measuring more than 185,000 m2, as well as a portfolio of homes comprising 750 units worth €230 million.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Slim Buys Bankia’s Realia Stake, To Make Bid For Whole Company

5 March 2015 – Bloomberg

Inmobiliaria Carso, a holding company owned by Mexican billionaire Carlos Slim, agreed to buy Bankia SA’s stake in Realia Business SA and make a bid for the whole company as he increases his investment in Spain.

Carso will pay 0.58 euros per share, or 44.5 million euros ($49.3 million), to buy Bankia’s 24.95 percent stake in the Spanish developer and has committed to bid for the whole company at the same price within nine months, the bank said in a filing to regulators in Madrid today. Realia shares closed today at 86 cents.

Slim, the world’s third-richest man, last November agreed to become the biggest shareholder in Fomento de Construcciones & Contratas SA (FCC), which is also Realia’s shareholder, as the construction company sought to cut debt. Slim is one of several high-profile investors, including George Soros, who are investing in Spanish companies, as they bet that growth will pick up pace as the country emerges from its property crash.

Hispania Activos Inmobilarios SA, a Spanish real estate investment trust, last November said it would offer 0.49 euros per share for Realia. FCC owns about 37 percent of Realia, according to regulatory filings.

Bankia, Spain’s fourth-biggest bank, has to sell off its industrial equity stakes as part of the terms of its rescue with European funds in 2012 after losses on real estate pushed it to the verge of collapse.

Original story: Bloomberg (by Charles Penty)

Edited by: Carmel Drake

Hispania, Merlin, Lar And Axia Invest €2.4 Billion In Less Than A Year

26/12/2014 – Expansión

SINCE MARCH / The four largest real estate companies listed on the continuous market (known as ‘the trading floor’ or simply, ‘the Floor’ in the US) have bought offices, homes and shopping centers, spending all the capital from their IPOs.

From non-existent to becoming an industry benchmark – listed REITs have become a big business in record time with a total worth of €2.4 billion. Lar España, Hispania Real, Merlin and Axia Real Estate Properties – the four REITs that have made their debut this year on the continuous market – managed to raise 2.5 billion euros in their respective IPOs since March. Nine months later, they have already invested 2.438 billion, exceeding all forecasts.

The successful adaptation of these ‘Anglo-saxon’ REITs started with their going public. The leaders of these companies convinced international funds like Pimco and T. Rowe, prominent financiers such as John Paulson and George Soros as well as investment firms like UBS, JPMorgan and Citigroup, to invest in real estate companies that were founded without any assets. Only Merlin Properties, which went public on June 30, had a preliminary contract to acquire the company Tree Investments, which owns 880 branches and five of BBVA’s office buildings.

Merlin is the REIT that has invested the most and the fastest. Thanks to several large-scale transactions, it has already spent 1.188 of the €1.25 billion it raised in its IPO. Thus, in addition to 739.5 million euros spent on BBVA buildings, Merlin also closed the biggest deal made by a REIT on a single property: the Marineda shopping center in La Coruña, Galicia, for 260 million euros. It also paid 130 million for five office buildings.

The quick closing of these operations has led those in charge of Merlin to start working on raising new funds to undertake further purchases. To do this, they have chosen to refinance the bridging loan they requested before forming the REIT in order to buy the BBVA properties. The company, which has been negotiating for months, could sign the agreement in the first quarter of 2015, financial sources point out.

Hispania

Created by the Spanish consulting firm, Azora, specializing in the management of rental and student housing, Hispania Real Estate Assets company made its debut on the stock market with a corporate structure that was different from that of other REITs. Soon after, the company created a subsidiary, Hispania Real, under this same framework, through which it has channeled much of its purchases.

Among the REITs, Hispania Real boasts the most diversified portfolio, with several office buildings, more than 400 homes, several hotels and the majority stake in several companies, including La Once’s real estate company, Oncisa.

Hispania’s last major transaction has surprised the entire industry: the acquisition of Realia. After allying with Fortress, King Street and Goldman Sachs, the three biggest creditors in real estate history, Hispania Real has launched a voluntary public takeover offer for 100% of Realia at €0.49 per share, i.e. €150 million. Having spent what was left of the 550 million obtained in March to go public in buying 50% of Realia’s debt, it has requested two lines of credit from Santander and CaixaBank worth 250 million euros in order to guarantee the purchase of the company.
While awaiting the close of this acquisition, Hispania is analyzing new 1.5-billion operations, including the purchase of a group of 16 hotels from the Barceló hotel chain for $425 million, as reported by EXPANSION on December 2.
Today, at a special meeting, shareholders will be asked to make a capital increase to address current and future projects.

Funding for projects

The other two REITs present in the continuous market (there are three other smaller REITs trading on the alternative investment market: Promorent, Entrecampos Cuatro and Mercal) — Lar España and Axia Real Estate — have invested €738 million in real estate.

For Axia, which raised 360 million euros in its IPO in July, has not only invested everything it had raised from international funds, but has also resorted to bank financing for its last operation: a portfolio of Credit Suisse real estate assets, which includes four offices and a retail space, costing a total of 180 million euros.
Lar España, which still has 63.57 million of the 400 million it raised, has also resorted to bank financing to acquire an office building in Madrid. In its market debut, the heads of Lar España said they would benefit from an additional 400 million euros from bank financing to deal with their operations.
New companies will soon be added to the list of REITs on the stock exchange. Among those confirmed are GMP and Bulwin, managed by the listed Quabit. Other companies are forecast to join the ranks as well, especially those managed by large international funds that have channeled purchases in Spain through REITs.

Original article: Expansión (by Rocío Ruiz)

Translation: Aura REE

FCC Reaches No Agreement With Soros & Turns to Carlos Slim

25/11/2014 – Expansion

Black clouds returned on FCC’s sky. When just a signature was missing on the agreement document allowing George Soros to take a 25% share in the contractor, out of the blue FCC announced the negotiations misfired and now it was in talks with Mexican investor Carlos Slim (pictured).

Mr. Soros was at the verge of buying all the pre-emptive rights of Esther Koplowitz in the upcoming €1 billion capital increase. The transaction would leave Esther Koplowitz with a 25% stake, instead of the current 50%.

The sudden break with Soros caused the contractor to fall on the stock exchange market by 3%.

As FCC informs, ‘the capital hike approved by the latest general shareholders’ meeting is now being exclusively dealt with Control Empresarial de Capitales, a company owned by Inmobiliaria Carso, which in turn belongs to the Slim family‘.

 

Original article: Expansión (by M. L. V.)

Translation: AURA REE

Guggenheim May Join Soros in FCC Capital Hike

24/11/2014 – Expansion

The €1 billion capital hike approved by the shareholders of FCC brings another surprise. Investment fund Guggenheim Partners could join financial magnate George Soros who was bound to subscribe to all increase shares corresponding to Esther Koplowitz (pictured) and take a 25% stake in the contractor. The businesswoman will reduce her holding to a similar percentage as now she owns 50.02% through B-1998.

Final shareholding structure of Fomento de Construcciones y Contratas will depend on the result of negotiations between Soros and Koplowitz teams. Still, the due diligence (or asset valuation) process is pending accomplishment.

It is expected that the final price will be slashed by 25-30% and that may attract some new investors. For instance, Guggenheim could obtain a 5% share.

For the first time, George Soros rescued FCC in December 2013, when the businessman bought a 3% share in the group for €55 million (15 Euros a share).

The current operation is said to be worth €700 million, of which €500 million corresponds to new shares acquisition and the rest to the value of the pre-emptive right of B-1998.

Esther Koplowitz foresees spending the equity on amortization of the €1 billion debt owed to BBVA and Bankia, which the banks prolonged by another 5 years at an Euribor + 250 bps interest rate.

FCC will intend most of the capital hike funds for repayment of the B tranche valued at nearly €4.53 billion. Originally amounting to €1.35 billion, the part grew by another €1.39 billion in interests which step-by-step went on growing annually from 11% to the present 16%. The agreement also involves a 15% write-off on the part of banks.

 

Original article: Expansión (by B. Badía & C. Morán)

Translation: AURA REE

Soros Becomes Strategic Partner of FCC

18/11/2014 – Cinco Dias

U.S. investor George Soros will become the strategic partner of Esther Koplowitz (both pictured) in FCC through a €1 billion capital increase agreement. Thereby, Soros will take on the entire increase amount corresponding to the businesswoman.

George Soros, currently holding a 3.8% share in FCC, will underwrite to 25%. The investor will inject €650 million and buy the pre-emptive subscription right. The price of the new shares has not been disclosed yet.

The contract is said to have been signed for a 4-year term and it implies ratification of the present managing board of the company.

FCC has come to agreements with 75% of its banking lenders, hoping to do the same with the rest. As the firm’s CEO Juan Bejar explained, the talks concern amortization of its €900 million debt and a 15% forgiveness.

Debt Amortization

The builder controlled by Esther Koplowitz will thereby liquidate a €1.39 billion tranche of the amount owned by the group. It currently pays an 11% interest rate bound to rise to 16%.

This way, in case of non-payment, the liabilities will upsurge to nearly €2.26 billion by 2018, and if FCC fails to pay it off again, the banks will seize its shares.

Therefore, the firm is going to intend the €1 billion increase for amortization of 21% of the total debt.

Specifically, €765 million will be destined for liquidating €900 million of this tranche thanks to this 15% release permitted by banks.

Furthermore, €100 million will be received by Cementos Portland, €100 million by FCC Environment and €35 million will be consumed by the transaction costs.

 

Original article: Cinco Días

Translation: AURA REE

Bill Gates to Increase His Stake in FCC

5/09/2014 – El Confidencial

FCC has started up a €1.35 billion capital increase designed to refinance its overall indebtness of €4.51 billion. The builder hired Santander and Morgan Stanley to issue 100 million new shares. The operation will be supported by world-wide known Bill Gates.

Financial sources indicated that the capital increase will positively impact the current shareholding of FCC as Esther Koplowitz will lose control over her 50.01% stake due to not being able to subscribe to it.

The unusal aspect of the operation is that Banco Santander will be the overall coordinator and not BBVA or Bankia that are the main lenders both of the froup and the family. Also, assistance of JP Morgan or Goldman Sachs is not ruled out for securitization reasons.

It is said that Juan Bejar, vice-presidend and CEO of FCC, will keep a part of the increase for Bill Gates (pictured) who in October 2013 bought a 6% stake at the firm for a total of €113 million. With the new participation, his share could rise up to 10%.

Moreover, the incapacity of Mrs Koplowitz to maintain half of the company, opens the door to the holding to foreign funds which turned their eyes to the builder once the Bill Gates news leaked out to the market.

Therefore, Mr Bejar had to speed the capital increase operation up. The final result will be announced in mid-September when the Koplowitzs will sign an agreement on refinancing of their €1 billion personal debt.

In the first half of the year, FCC lost 52 million, while its ebitda rose by 32% to €380 million. The constructors financial debt marks presently €6.41 billion.

The capital increase puts aside the intention of George Soros to buy a part of Esther Koplowitzs debt and grab a bigger stake in FCC.

 

Original article: El Confidencial (by Agustín Marco)

Translation: AURA REE

The Listed Real Estate Investment Companies Shake Up The Property Market With €1.500 Million of Purchases

06/08/2014 – El Economista

The influx of the real estate investment companies onto the Spanish stock markets so far this year has caused a flurry of transactions in the real estate sector, particularly intense in recent weeks, with purchases amounting to 1,533.2 million and which inject life into a market which is beginning to show signs of a change.

The listed real estate investment companies (known as “socimis”) have become a very tax-appealing vehicle for taking advantage of the opportunities which the Spanish real estate sector offers, in which prices have experienced a significant decline since the “boom” years, considerably more so than that experienced in neighbouring countries.

This situation is benefitting from a context marked by the market’s high liquidity, fundamentally thanks to foreign investment funds.

The first to debut on the stock market was Lar España Real Estate Socimi, which did so on 5 March with an initial share capital of 400 million.

The real estate investment entity of the Lar Group has announced acquisitions of 171.7 million, mostly shopping centres.

It has purchased the Las Huertas shopping centres in Palencia and Txingudi shopping centre in Irún from Corio for 39.4 million; Albacenter’s shopping centre from Unibail Rodamco for 28.4 million; the Anec Blau shopping centre in Castelldefells (Barcelona) for 80 million and another commercial building in Villaverde occupied by Media Markt for 9 million.

Furthermore, it has acquired an office building in Madrid’s Arturo Soria street for 24.2 million and another 14 floors situated inside the M-30 building for 19 million.

The next company in the sector to make the leap onto the stock market was Hispania, the listed company controlled by fund management group Azora and which is also part-owned by the multi-millionaire George Soros, who subsequently created his own Socimi with which he has made several purchases.

Hispania has taken 90% of the share capital of Oncisa, the real estate company of Once, for 80.2 million; it has purchased 213 homes in Barcelona’s Diagonal Mar park and 237 parking spaces from Banif for 63.8 million; 18,500 m2 of offices in Barcelona’s Glòries shopping centre for 40 million; 4 office blocks and 2 NH hotels in Madrid for 42 million and 199 homes in Majadahonda and the district of San Sebastián de los Reyes for 30 million.

IT has also acquired an office building in the district of Chamartín for 15 million and Marbella’s Guadalmina Hotel for 21.5 million. In total, Hispania has accumulated 292.5 million in purchases.

The socimi Merlin Properties, for its part, on 30 June made the largest listing on the stock market since 2011 with a valuation of 1,250 million.

Since its debut, it has accounted for purchases of almost 1,000 million: the purchase of Bosque y Tree Inversiones (which comprised 880 bank branches and 5 buildings leased to BBVA) for 739.5 million and the Marineda City shopping centre in La Coruña, partly owned by Manuel Jove, for 260 million.

Also making a listing on the stock exchange was Axia, with a valuation of 360 million and which has already purchased 6 properties for 70 million, and Mercal.

The Portuguese management company Norfin, Urbas y Quabit have also shown their intention to go public by launching a socimi.

Original article: El Economista (by Cora Serrano)
Translation: Aura REE

Koplowitz Hastens Negotiations With Soros

1/08/2014 – ExpansionPro, Vozpopuli

Esther Koplowitz and her lenders are determined to negotiate the sale of a part of FCC´s €1 billion debt to George Soros in extremis. With the operation, the businesswoman seeks a way out to avoid losing control over the construction firm (she has a 51% stake in it) and allowing the banks to execute the warranties.

Ms Koplowitz, the lenders and the investor were on the treshold of coming to an agreement but in the last moment it was lost due to discrepancy in the parties´ expectations. However, the deadline for making a decision on the debt refinancing concluded yesterday.

The talks will continue with hope of reaching any agreement by Monday.

What they meshed almost for sure is that Soros could buy Dominium, one of Koplowitz´s firms, and perhaps inject fresh capital by purchase of subordinate bonds issued by B-1998 (89% of the stake belongs to the businesswoman, allowing her to hold 50.1% in FCC).

The other option constitutes B-1998´s capital enlargement through amortization of €1.3 billion debt of FCC which is convertible into shares. With this move, Mr Soros could amplify his stake in the builder (currently he holds 3%).

However, performing the latter is much more complicated as its requires an agreement with Bankia and BBVA´s syndicate. Probably, such may not be reached before September.

U.S. Guggenheim Partners has also been interested in refinancing FCC´s indebtness but the negotiation exclusivity contract with Soros effectively kept the investment fund away.

 

Original article: ExpansiónPro (by J. Zuloaga, 1 de Agosto 2014, pp 8), Vozpopuli

Translation: AURA REE

Guggenheim Also Wants to Refinance FCC´s Debt

22/07/2014 – Expansion

U.S. investment fund Guggenheim Partners offered its financial support to Esther Koplowitz, the main shareholder of FCC, troubled by an indebtness reaching €1 billion.

According to sources from the financial sector, the bid of Guggenheim is considered to be better than the one of George Soros. However, before accepting the new offer, the exclusivity agreement with Soros shall be modified. The Koplowitz family and their lenders, Bankia and BBVA, will try to break free from the committment.

Esther Koplowitz who controlls FCC through her firm B-1998 (an 89% stake) prefers to give up a share in B-1998 without losing the lead to selling FCC to Soros with no chance of having it back.

She will be able to repay a part of the debt with proceeds from divestments and to negotiate with the banks on delay of the loan maturity, currently set on 31st July. Apart from personal financial problems, Koplowitz seeks equity to enlarge the capital of FCC, allowing her to prepay a €1.3 billion credit convertible into shares.

On the situation twist, George Soros consults his advisors from Cuatrecasas about the possibility of buying the debt from Bankia and BBVA with a discount. On the contrary to him, Guggenheim is a long-term investor wishing to participate in the company´s strategic moves.

The fund has been very active on the Spanish market since the last year when it explored the purchase of NCG Banco. Guggenheim manages a €155.3 billion worth of assets and employs 2.500 people all around the world.

 

Original article: Expansión (by C. Morán & J. Zuloaga)

Translation: AURA REE