Tag: waiver

Slim Launches Voluntary Takeover For 100% Of Realia

28 January 2016 – Expansión

The Mexican multi-millionaire Carlos Slim has launched a takeover bid for 100% of the real estate company Realia, in which he already holds a 30.4% stake, at a price of €0.80 per share. The voluntary offer represents a premium of 17.6% with respect to the trading value yesterday, when the share price remained stable (at €0.68/share).

In March last year, after acquiring Bankia’s stake in the real estate company, the Mexican businessman, who is also the majority shareholder of FCC, in which he holds a 27.4% stake, launched a takeover for 100% of the real estate company Realia, at a price of €0.58 per share, for which the Socimi Hispania also made a bid. In turn, FCC holds a 36.9% stake in Realia.

On this occasion, Slim, through his company Inmobiliaria Carso, has decided to formulate his offer on the understanding that a strategic plan will have to be prepared for the Realia group, in order to clean up the company and turn it into a business with a stable level of recurring income, that is balanced with its debt, according to a report submitted to Spain’s National Securities Market Commission (CNMV) yesterday.

On the other hand, by launching a voluntary takeover in this way, Slim avoids the need for the CNMV to set an equitable price, which in all probability could be higher. Carso has been advised by the law firm Ontier.

The Mexican businessman considers, in addition, that by formulating a takeover at an equitable price, a new window of liquidity will be opened for the minority shareholders, which will allow them to take a decision as to whether to continue in the company or sell their stakes. The operation is subject to approval by the CNMV.

On 8 February 2015, the Mexican multi-millionaire advised the CNMV that his stake in Realia exceeded 30%, following the subscription of shares under the framework of the capital increase, which the real estate company launched for €87 million.

At the time, he announced that he was going to request a waiver from the obligation to launch a takeover for 100% of the company, although in the end, he has decided to submit a voluntary takeover bid.

Nevertheless, and despite having exceeded the 30% stake in the company’s share capital, which requires the launch of a takeover for 100% of the company, Slim believes that the criteria for the aforementioned waiver apply in this case.

He says that he has not appointed the majority of the Board members or of the Executive Committee, he has not exercised any of the voting rights that apply to holders of stakes of more than 30% in Realia. Furthermore, none of the events established in Article 5 of the takeover law that would attribute additional voting rights in Realia to his company, have taken place, besides those already mentioned.

The Mexican businessman ranked in second place on the Forbes list of the richest people in the world.

Original story: Expansión (by M. Anglés)

Translation: Carmel Drake

Sareb Calls For Changes To Reyal Urbis’s Proposed Agreement

10 March 2015 – Expansión

Negotiations / The real estate company’s main creditor shares the legal concerns raised by the judge regarding the proposed agreement. If they are addressed, a discount of up to 93% could be accepted.

The real estate company Reyal Urbis is using up its last options to save itself from liquidation. The company submitted a proposed agreement on 13 February, which must be approved or rejected by its creditors before next Friday 13 March. Nevertheless, the proposal that has been presented has raised important questions that have lead the judge in charge of the bankruptcy process to reject the offer and ask Reyal for a series of changes and clarifications.

The judge from the Commercial Court number 6 in Madrid is not the only party for whom this proposal to exit the bankruptcy process has raised doubts. Sareb, the main creditor of Reyal Urbis with a debt of €785 million, sent a letter to the court last week expressing its concerns. Last Friday, the judge himself made these concerns clear through a series of requests to the real estate company. One of Sareb’s demands is to know the current value of Reyal Urbis’ assets, through the performance of a new appraisal.

One of the aspects that has generated the most doubt, for both the judge and Sareb, relates to the application of the agreements and waivers to all of the creditors, even those that do not sign up to the agreement. Reyal is making its own interpretation of the recent regulatory changes in the bankruptcy law whereby, if 75% of the creditors adhere to the payment proposal, then rest should waive the mortgage rights they obtained during the four refinancings that the company signed before it filed for bankruptcy. The judge considers that it cannot be assumed that all of the creditors will waive (their rights) or that the “knock-on effect” will apply.

Another controversial point is the high percentage of the discount that Reyal is calling for, which ranges between 88% and 93% for the creditors with syndicated debt (which includes Sareb and entities such as Santander, RBS and Barclays), without offering a credible business plan. In his ruling, the judge demands that (Reyal Urbis) “correct the weaknesses identified in its feasibility plan, in order to provide the necessary and essential objective justification of the discounts requested”.

Reyal has until the end of March to clarify these points and also whether it has a parallel agreement with the Tax Authorities. The real estate company intends to use some of the assets that it does not grant to the creditors (valued at €260 million and chosen by the company) as a guarantee to the Tax Administration.

With the new proposal on the table that resolves the possible uncertainties regarding the distribution of assets, the creditors will consider whether to sign up to the agreement, or conversely, let the real estate company go under, as happened with its counterpart Martinsa Fadesa. Sources close to the creditors believe that the two cases are not the same and that the entities may give Reyal a chance, just like they did with Fernando Martín’s company in 2011.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake