And it all loooks very painful for the Sanahuja family, who control controlled 80% of the group.
They took on over €5bn of debt to acquire their stake in the company, which they rather unwisely used as collateral for other loans.
The banks have now called time on that “double leveraging” position and will be taking control of a 54 per cent holding in Metrovacesa as a result. The creditors are reportedly Santander, BBVA, Popular, Banesto and savings banks La Caxia and Caja Madrid.
As noted last week, Metrovacesa has been dancing on a knife edge for a while.
Last month, the Spanish market regulator, concerned about the company’s financial position, demanded Metrovacesa disclose information about its various loan facilities.
Metrovacesa revealed that the terms of a €3.2bn syndicated loan might be breached when they were tested at the end of the year.
More recently, it was forced to sell the London headquarters of HSBC back to the bank for £170m less than it paid for the tower in Canary Wharf just 18 months ago.
Of course, Metrovacesa is not alone. It is just is one of several large real estate groups in Spain trying to stave off administration following the collapse in the country’s residential housing market.
Trading in Metrovacesa shares has now been suspended.
Related Links:
Metrovacesa confirms HSBC HQ sale – FT.com