The Spanish developer Nozar has sought court protection from its creditors after it failed to reach a deal with its banks over restructuring 700 million Euros in debt. Nozar took the step at the end of last week when 4 months of negotiations with bank creditors collapsed without an agreement. This is the first step of proceedings in Spanish commercial law that often lead to bankruptcy and liquidation.

Though a private company, Nozar is one of the biggest developers in Spain. It is the latest Spanish developer to fall victim to a lethal combination of excessive debt and a collapse in sales, following in the footsteps of Llanera, Martinsa Fadesa, Habitat, Tremón, Aifos, Constructora Pedralbes, Edisan, Obrum, DHO and Begar, amongst others.

The collapse of Nozar shows that the Spanish property market is still in deep trouble, despite glimmers of more positive news in recent months, such as a slight bottoming out in the market crash. It shows that the market has still not recovered sufficiently to keep major players like Nozar afloat, more than a year after the developer Martinsa-Fadesa went into administration.

Some commentators in the Spanish press have suggested that Nozar has gone under because the banks have decided to stop bailing out developers and swapping debt for property. If so, expect more high profile casualties in the months to come.