Noriega, one of the biggest home-builders in Andalusia, has gone into voluntary administration with debts of 1.1 billion Euros, reminding us how tough things still are in the Spanish property market.
Under Spanish law, companies that are unable to cope with their debts can request court protection from their creditors, and then continue trading whilst renegotiating their debts, albeit under the watchful eyes of court-appointed administrators.
In many cases (but not always), voluntary administration is a fatal sign that ultimate ends in bankruptcy, with the business wound up and the assets sold to pay off creditors.
Founded in the 60’s, and a surviving veteran of many past economic crises, Noriega is one of Andalusia’s most blue-chip builders, belonging to the venerable Sánchez-Ramade group, the second biggest commercial group in Andalusia.
Like a number of other big real estate companies in Spain, Noriega managed to renegotiate its bank financing 2 years ago, hoping this would give it breathing space to weather the crisis. The length and severity of this crisis put paid to that plan.
According to Spanish press reports, Noriega had debts of 1.1 billion Euros, including 68 million Euros it owed to 900 trade creditors. It was working on a number of unfinished developments.
Noriega had agreed a cram-down of 40pc with suppliers, but in the end failed to reach agreement with banking creditors like BBVA, Caja Madrid, and Banco Sabadell.
Any clients of Noriega’s with sales contracts outstanding should consult their lawyers immediately to review their situation.
Noriega developments of potential interest to expat buyers:
Dunas Green, Estepona, Málaga
Quinta Clavero, Málaga
Punta Paloma, Manilva, Málaga
Monte Real III, Torremolinos, Málaga