Spanish property developer Llanera – one time star of the Spanish property boom – will be closed down after almost six years of trying to stave off liquidation, leaving many British victims in its wake.
Llanera, a property developer from the Valencian Region that enjoyed explosive growth during the boom selling holiday-homes to Britons, will finally be put out of its misery, almost 6 years after it first went into court administration with 700 million euros of debt.
This is what I wrote about Llanera in my news Spanish property review of September 2007 (published in October 2007):
Due to liquidity problems the Spanish property developer Llanera filed for protection from its creditors on Monday 1 October, the first major Spanish developer to do so as a consequence of the Spanish property downturn.
Llanera specialised in developing second homes in the Valencian Region and Murcia, and spent heavily on marketing in the UK, where it still sponsors Charlton Athletic FC.
It is unclear what will become of the Llanera’s ongoing developments, and how buyers on these developments will be affected.
Llanera is unlikely to be the last Spanish developer to run into financial difficulties, so buyers on new developments in Spain would be well advised to check the balance sheets of developers before they buy.
Yes, you read it right: Llanera used to sponsor Charlton Athletic, in what must have been one of the worst sponsorship deals ever, costing the company £6.6m.
Given its focus on the UK market, most of Llanera’s international clients were Britons who bought off-plan during the boom, and would have been left with worthless contracts or struggling to execute bank guarantees when Llanera filed for bankruptcy.
The astonishing thing is how long Llanera has survived as a completely insolvent company with no viable future. The quicker zombies like Llanera are liquidated, the sooner Spain will recover.