UPDATE: Six Creditor Banks Take Control Over Metrovacesa
February 20 2009 - 9:37AM
Dow Jones News
Six Spanish banks have taken control of troubled real estate
company Metrovacesa SA (MVC.MC), swapping debt for company shares
held by its indebted top holder, the company said Friday.
Spain's Sanahuja family, which owned close to 85% of the
country's top property company by assets, agreed in December to
swap a 54% stake for EUR2.09 billion in debt. Banks had until
Friday to execute the agreement.
The fall of Metrovacesa into the banks' hands marks the end of
the aggressive, leveraged expansion of Spanish developers in a
booming property market that collapsed soon after the global
financial crisis hit. In its wake, banks now are having to exchange
billions of euros of debt held by the owners of property companies
for real-estate assets that are difficult, if not impossible, to
sell under current market conditions.
Rival Inmobiliaria Colonial SA (COL.MC) recently fell into the
hands of creditors after its main shareholders failed to service
debt backed by company shares.
Creditors taking control of Metrovacesa include Banco Bilbao
Vizcaya Argentaria SA (BBV), Banco Espanol de Credito SA (BTO.MC),
Banco Sabadell SA (SAB.MC), Banco Santander (STD), Banco Popular
Espanol SA (POP.MC) and Caja Madrid.
The demise of Metrovacesa took place after a bitter board
dispute for control of what once was one of the largest real-estate
companies in the euro zone. The battle for control of the company
culminated in 2007 in a complex asset separation between its main
owners.
The Sanahujas then assumed control of the Metrovacesa brand and
most of its assets in Spain, while the group of investors led by
former chairman Joaquin Rivero got the French assets held by its
Gecina SA (1004086.FR) unit.
Metrovacesa had some EUR7 billion in debt at Sept. 30, before
selling back to HSBC Holdings PLC (HSBA) its London headquarters in
December for about GBP838 million.
Four of Metrovacesa's creditor banks also agreed to buy another
10.8% stake, or some 7.5 million shares, bringing the banks'
combined stake to 65.5%. The Sanahujas have an option to buy back
the 10.8% stake after four years for EUR57 per share, Metrovacesa
said.
Under terms of the agreement, the Sanahuja family will see their
ownership reduced to about 30%. They are also giving up voting
rights and will lose all but one seat on the board of
directors.
Roman Sanahuja Pons, who was up to now the chairman of
Metrovacesa, will remain as director. Vitalino Nafria, a former
senior BBVA executive, was appointed chairman.
Company Web site: www.metrovacesa.es
-By Santiago Perez; Dow Jones Newswires; (34) 395 8119; santiago.perez@dowjones.com
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