Colonial sells EUR 300 million in assets
Property firm looking to restore investor confidence after bourse debacle.
2 January 2008
MADRID - Spanish real-estate firm Colonial Inmobilaria has sold over EUR 300 million in assets as part of further efforts to revive investor confidence after the end of a property boom.
Leading Spanish savings bank La Caixa said late Monday it had acquired one of the towers hosting the bank's headquarters in Barcelona from Colonial and adjacent parking lots for EUR 107 million. La Caixa had previously been renting the 12-storey tower.
That deal followed on the heels of the sale of several sites in Madrid and Barcelona to toll-road operator Abertis' logistics division for EUR 201.6 million. Abertis Logística is acquiring a total of 400,000 square metres of space in Barcelona and Madrid's industrial belts.
The asset disposals came after Colonial's share price plunged some 40 percent in the last two trading days of last year amid concerns about the heavily-indebted property company's ability to weather the domestic slowdown.
Property companies have also been hit by a drying up of liquidity in the wake of the crisis sparked by the US subprime mortgage market.
The share price slump prompted the resignation of Colonial Chairman and main shareholder Luis Portillo and several other directors. In a statement to the National Securities Commission (CNMV) released late Monday, Colonial said chief executive officer Mariano Miguel would also assume the duties of chairman.
Colonial is Spain's second biggest property company, with most of its activity concentrated in rentals in business districts in Madrid, Barcelona and Paris. The firm's market capitalisation dropped 62 percent last year to EUR 3.1 billion. As of the end of September of last year, Colonial had net financial debt of some EUR 8.9 billion.
Portillo has a 40-percent stake in Colonial. Other directors standing down in the board restructuring include María Jesús Valero Pérez, who represents Desarrollo Empresarial Quetro, and Yolanda Mayo Ranera, who represents Grupo Portival. According to the CNMV's website, Desarrollo Empresarial Quetro has a 5.3-percent stake in Colonial and Grupo Portival 12.7 percent.
Confidence in the Spanish property sector took a knock in July of last year when the share price of one of the smaller players in the sector, Astroc, plunged from a high EUR 72 to under EUR 9. That also forced the resignation of the chairman of Astroc, Enrique Bañuelos.
[Copyright El Pais / A. SIM 2008]
Subject: Spanish news