Three keys to OHLA’s sale in Centro Canalejas: bond, debtor and inflated price

This building has been owned by OHLA since 2012 and was the historic owner at that time. Juan Miguel Villar Mir bought it from Banco Santander. It was the infrastructure company that undertook a massive and complex renovation to transform the complex into a five-star hotel, luxury apartments and a major shopping centre. In 2017, it was ruled that the publicly traded company was majority owned by the Mexican Amodio brothers. sell 50% of the property to MohariInvestment group of Mark Scheinberg, one of the richest men in Turkey and the founder of Pokerstars.

The announcement that OHLA planned to sell its shares was a revolution in the market. Last week, Hidden And Five days They reported that the company submitted a sales order to Banco Santander to contact potential investors. The price at which OHLA values ​​its participation is between 400 and 500 millionincreases the price of the property to 800 or 1,000 million.

Despite Mohari has the right of first refusalDifferent information published in recent months provides that: I will not implement this. Relations between both partners are not very good: both have initiated an arbitration process in the Paris Chamber due to disagreement on the partners’ agreement and how to manage the asset.

An inflated price

inside the market There was a surprise in the default price set by OHLA It is about participation in the asset. “They can want whatever they want. Another thing is for someone to pay for it,” says one real estate industry executive. When OHLA sold 50% to Mohari for 225 million, almost half, in 2017, the value of its share was pegged at 400 or 500 million. According to experts interviewed, this increase is not supported by the asset’s good performance or valuation.

Especially, Audit conducted by Deloitte 90 percent of 2022 company accounts accessed via Insight View by ACTIVOS, Prensa Ibérica’s economic vertical, value “hotel business” and “owned facilities.” 543 million eurosWell below the potential seller’s expectations. OHLA’s own assessment of its involvement is 180 millionIt is even lower than what is recorded in the accounts of the investee company. To this we must add the corrective effect that the interest rate increase may have on real estate throughout 2023, which we should expect until the end of the year.

The only thing that can be done It is Canalejas’ uniqueness that supports its valuationThis makes him a ‘trophy asset’. The truth is that just as the dynamics and numbers of the Four Seassons hotel are good, the same is not the case with the shopping gallery, which is struggling to be filled with shops, but also full of customers. If any buyer were willing to pay the amount OHLA is asking, all experts agree that it would be a purchase without any financial justification.

Sales manager and creditor

It is not a coincidence that Banco Santander was appointed as the person in charge of searching for potential investors to purchase 50% of Canalejas. Normally, in such processes, property owners tend to prefer real estate consultancy and brokerage firms. But not OHLA. One of the sources interviewed explains that the financial institution received this authority because of its relationship with the entity.

According to the 2022 accounts of the Centro Canalejas Madrid company, SLU has a debt of 192.5 million euros to credit institutions, both short and long-term. pertaining to the source of the debt Loan issued by Banco Santander, Banco Popular and CaixaBank to the company, December 2014Together maximum amount 268.46 million. Although the loan was granted for nine and a half years, it was renewed up to three times and its terms were changed, otherwise it would have matured last June.

Centro Canalejas’ accounts do not show what percentage of its debt is held by Santander, but since the loan was granted, the amount absorbed by the Cantabrian-based organization and from Banco Popular, chaired by Ana Botín, has been added. Predictably, this means that Santander is the largest creditor of Canalejas and therefore of OHLA and Mohari. In this sales process where the business has the task of finding potential buyers, There is a special interest because in addition to finding the investor, he will try to make him pay as much as possible in order to get back his principal and interest.

Bonds as selling pressure

Another point that influenced OHLA’s decision to sell Canalejas is the repayment of its debts. The company must: It faces repayment of two bonds in 2025 and 2026 It has already been refinanced in 2021, including deduction and partial capitalization. Bills of construction and infrastructure company exceeded 400 million euros and win 9.75% annual interest as published since last September 15 Five days.

The high interest burden forces OHLA to reduce its liabilities as quickly as possible through different liquidations. The most important of these is the Madrid property mentioned above, but Sale of service subsidiary Ingesan. According to various publications, OHLA will negotiate the sale of the company to Serveo, which could pay between 60 and 90 million euros, as reported by Expansión. This company is majority controlled by the Portobello Capital fund, which initially acquired 75% of Ferrovial Services and subsequently expanded the company. Without going any further, Serveo completed the acquisition of the same Sacyr subsidiary the same year for $87 million.

When consulted by Banco Santander, OHLA and Centro Canalejas Madrid, SLU, neither wished to make a statement or participate in carrying out this analysis.