The large property developer wants to exchange debt for some of its assets
The Murcia newspaper, La Verdad, reports today that the Polaris World property developer based in the region, is in talks to reduce its debt by handing over some of its property assets to the banks it is in debt to.
The company is reported to have taken on loans totalling nearly 900 million € over recent years and is reported to now be offering both land and housing to the banks.
The newspaper reports that if the talks are successful the company could clear its debt to leave it in a good position for the future. The main banks concerned are Bancaja, CAM, Banco Popular, Banco de Valencia and Cajamurcia.
Given the collapse in the British market for homes in the region, Polaris World has recently concentrated its promotions on the Spanish market.
quite. Doesn’t add up does it? I very much doubt PW would even own assets outright that could be handed over to pay that debt off, so probably a stalemate situation? Aifos probably in similar situation?
Say they owe 900 Million and (big leap..) the avg property value is 200k (and thats what the bank would give them)
900 Million divide by 200,000 = 4,500 units
Ha ha mad numbers eh?
I think you are missing the point slightly, obviously Polaris are in a great deal of trouble and been allowed to continue far too long, its not just about units of property, its about land and other assets, eg golf courses etc. Obviously they are imparred assets now since land values etc have often taken a knock (look at La Manga club which is struggling to be valued at 100m by its auditors based on circa 5m of losses last year), that said to sum it in terms of units is overstating the number of units Polaris needs to shift.
In terms of ‘the bank’ being in trouble, its obvious the structuring of the debts is amongst many banks and a certain amount of the debt will be cleared or swapped for assets.
That said I cannot see how Polaris can continue, of course it could never continue as it ‘was’, the end had to come one day unless it diversified or wound down slowely.
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