Le Monde | • Updated | By
Monday, March 2 in the evening, the National Securities Market Commission (CNMV), the stock market authority, officially announced the decision of the giant Spanish property Martinsa Fadesa to hire a liquidation process. The banks, which had signed an agreement to allow it to restructure its debt and scale in 2011, did not approve its latest plan. This provided capitalize debt in exchange for 70% of the company.
Martinsa Fadesa leaves a liability of about 6.995 billion euros of debt, including $ 3.2 billion from banks. She did, to mop up that 2.392 billion euros of assets or a “hole” of $ 4.6 billion.
- Why is this bankruptcy symbolic
The end of Martinsa Fadesa is symbolic in three respects. First, because the group was born in 2006, in the real estate boom. By buying another real estate group Fadesa to 4 billion euros, the company Martinsa then became the first developer housing in the country, with 13 billion of real estate assets.
Fernando Martin , its president, thought he had found the goose that lays golden eggs. Spain was built many homes than Germany and France combined. Banks lent besides individuals and developers. And “Lords of the brick,” as Mr. Martin seemed to rule the country. Emblematic of the new Spanish billionaires, there was even a time presided over Real Madrid.
Martinsa Fadesa is also symbolic because when the bubble burst in 2008, just two years after its birth, the company shook the country by announcing the largest ever recorded termination payment, a prelude to the Spanish financial crisis.
With nearly 7 billion euros of debt, nearly 45 banks among its creditors, she put three years to get out of default. In 2011, she managed to reach an agreement with the banks, probably too ambitious to settle its debt in eight years.
Symbolic, this failure is also because it reflects the new the real estate sector bank relationships. Since December 2013, unable to meet the financial commitments to its creditors, Martinsa Fadesa is negotiating with its banks, in vain.
The Spanish financial institutions, which had to increase provisions on toxic assets recent years, do not take more risks. However, Martinsa Fadesa still displayed 313 million euros in losses in 2014. While this is less than half the previous year and that its turnover increased by 18% in 2014, banks have this time preferred to abandon the group.
- Is the sanitation of the Spanish real estate sector over?
No. The collapse of Martinsa Fadesa may well not be the last. Reyal Urbis The group insolvent for two years, trying to negotiate with the banks to clear 80% of its debt, which amounts to almost 4 billion euros. It could announce, too, the current liquidation in March if no agreement is found.
However, the sanitation sector is very advanced. Dozens of developers have been bankrupt since the beginning of the crisis, banks have transferred € 80 billion of “toxic” assets to Sareb a “bad bank” public, responsible to market and batch at bargain prices the difficult legacy of the housing bubble.
Now, real estate seems to show signs of recovery, although timid. After seven years of falling, the number of home loans rose slightly for the first time in 2014 (+ 1.6%). The number of permits for new construction as well (+ 1.7%). And in seven regions of Spain, prices are starting to rebound, especially the Balearic Islands, Cantabria and the Canary Islands. Finally, in 2014, banks have managed to cut for the first time the volume of toxic real estate assets.
“The industry is slowly recovering , should the economist Julio Rodriguez , former president of the mortgage bank. The international investment funds have bought property developments. We see more applications. However, it will take time to complete this consolidation. We start from levels that are historically low in terms of construction and home sales. And in late 2013, Spain had 570,000 empty new homes, some probably never sell. “
- he weighs Realtors still a lot on the economy and the Spanish banks?
Yes. According to the calculations of the daily El Pais from the results presented in recent days by the seven major banks in the country, they have completed in 2014 with 125 billion euros in loans and toxic real estate assets ( arrears, foreclosures, vacant lots, …). It’s huge, but it’s still 7 billion euros less than in 2013.
To cover these risks, banks have made important provisions that cover 60 billion euros . So the income statements of these institutions have largely reflected losses related to distressed assets. And bankruptcies like those of Martinsa Fades, are largely already counted.
In 2012, Spain had to request assistance in Brussels 40 billion for its financial sector and nationalize more banks. The time seems ripe to recover some of the funds then injected through the Sareb, which sold on sale of international funds, or through the sale of shares of Bankia, nationalized bank, back to health.
“It is likely that from time to time, the government has to pay a few new invoices in respect of such asset protection scheme, a kind of insurance covered by the Frob, public funds bank restructuring for banks that have absorbed rotten institutions, says Rodriguez. But it will not be as dramatic as it was. “
No comments:
Post a Comment