The slowdown in the Spanish property sector and the credit crunch claimed another victim yesterday as one of the smaller players sought protection from creditors.

27 March 2008

MADRID - The slowdown in the Spanish property sector and the credit crunch claimed another victim yesterday as one of the smaller players sought protection from creditors.

Cosmani Inmobiliaria said Wednesday it and four other companies within the Cosmani group filed for receivership on 17 March as it seeks to have the repayment of EUR 350 million in debt rescheduled.

In a statement, Cosmani cited "adverse conditions in the property sector" and "pressure" from creditors anxious to call in debt, "even before it is due."

Cosmani insisted it was suffering from a "transitory" lack of liquidity, adding its solvency was not in question, with debts due accounting for only 21.9 percent of its assets, which are valued at EUR 1.6 billion.

However, there was more uplifting news yesterday for Cosmani's larger rival Martinsa Fadesa, which kept the wolves from the door by finally convincing all of its creditors to refinance its total debt of EUR 5.153 million. In doing so, Martinsa avoided having to make a repayment of EUR 362 million, which was due yesterday.

Meanwhile, Colonial, which is saddled with debt of EUR 9 billion, continues in talks with its creditors after the Investment Corporation of Dubai withdrew a takeover bid.

[Copyright El Pais 2008]