Reply To: Developers going bust

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The Inmo Colonial saga goes on.The Dubai Investment Company appears to have given up in its attempt to buy the ailing company. Now the major banks plan to take over the reins of the company, nothing is certain yet but looks to be the most likely way forward. The banks want to protect their interests and stop the two major shareholders making a bad sale. The Dubai offer was finally 1,19 europs per share having offered 2,15 e initially. Must have seen some of the worms in the can.

The banks are now thinking of arranging a business plan for the longer term and utilising the high calibre of the Colonial portfolio.

Luis Portillo the major shareholder owes 1.473,5 euros to 14 banks and savings banks.the biggest creditor is Banco Popular with 365,1 m euros,followed by La Caixa, 161,3m and Bancaja 116m. His partner Luis Nozaleza owes 457m euros ,the majority to Reyal ,205,2 m. He and Portillo own 47 % of the Colonial shares. An additional total of 6,400 m is owed by the company to Goldman Sachs,Eurohypo,Calyon, and Royal Bank of Scotland.

These latter banks agreed last week to back the business plan proposed by Portillo and Nozaleda. The group has agreed to sell up to 33% of its interest in Societe Foniere Lyonnaise (SFL) which had been delayed due to the talks with Dubai. The company also states that this debt of 6.400 m euros and other debts due repayment over the next few years seem “perfectly realisable”

Encoval a company with 937 flats in various stages of construction in the Valencian Community and Tarragona.has entered in “Suspension de pagos”, making a total of over 40 companies to do so this year. The amount of debt has not been quantified. The company is 40%owned by the property company Zamir Siglo xx1. Its sales totalled 36,2 m euros in 2006 and it debt was 46,2 m euros. So probably only God knows how much it is now.

The company found itself entrapped by lack of liquidity and non payment by clients. The principal clients of the company are Espacio s.l ,Encovil,Promociomnes Denia 2002,Nuespri,Cisa Habital,Parque Sol,Vallehermosa,Pinar Levante and Inmo Cuz de Jativa.

The Euribor rose again yesterday to its highest level this year. Things aint getting any better ,no matter what the agents say.