Fbex, the promoter that began the construction of the building that burned in Valencia yesterday, has not operated since 2011. Led at the time by Catalan businessman Juan Parada Henares, the company filed for creditors’ protection in 2010 and was subsequently liquidated after failing to meet its bank debts accumulated during the real estate boom.
The cause of the fire remains unknown, but the rapid spread was linked to a polyethylene cladding of the facade, a highly flammable material that assisted in the flames’ advance. At that time, under the then-current Building Technical Code, the material was permitted in construction, though since 2017 it has been prohibited following the Torre Grenfell disaster, which prompted the European Union to tighten regulations in this area.
Fbex belonged to a long list of developers and construction firms that once formed a housing and building industry responsible for a sizeable share of Spain’s gross domestic product. Today most of them have disappeared through liquidation, such as Fbex, Reyal Urbis or Martinsa Fadesa, while others survived thanks to rescues by banks and foreign investment funds after the bubble burst, like Colonial, Realia or Metrovacesa.
Fbex’s activity focused mainly on promoting primary residences in urban centers across Catalonia, the Valencia Community, Murcia and the Balearic Islands, supported by a network of 80 offices. In 2005 the promoter controlled a land bank of 1.3 million square meters, capable of supporting up to 10,000 housing units, according to an interview with Juan Parada in the SuVivienda supplement.
Between 2008 and 2010, the last figures presented before the creditor protection filing, Fbex reported revenues of 553 million, 80 million and 165 million euros, respectively, based on data available from Insight View. In all those years, the promoter posted substantial losses, particularly the last, which closed with a net loss of nearly 157 million euros, a figure roughly equal to its total sales after asset revaluation adjustments.
On the path to creditor protection
In 2008, Fbex secured a refinancing with lenders that reduced its liabilities by almost one third, cutting debt from 1.8 billion euros to 640 million. Yet as the Spanish real estate cycle cooled, the promoter found itself compelled to enter creditor protection before the Mercantile Court No. 88 of Barcelona in May 2010. At that time, it had financing deals with up to 32 banks and savings institutions, including many now defunct such as Caja Castilla-La Mancha, CatalunyaCaixa, BMN and Banco Popular. Merely paying interest on these liabilities required an annual outlay of about 65 million euros which could no longer be sustained.
Finally, in November 2011, Fbex could not secure agreement with creditors. Less than half of the estate supported the proposed debt write-down of 85% on the 463 million euros still owed. Consequently, the judiciary issued a liquidation order and began selling and allocating assets.
By 2015 Fbex still appeared on the Ministry of Finance’s debtor list, owing 37.7 million euros, though the latest records no longer show this debt. Two years later, the Official Registry Bulletin (BORME) indicated that Fbex’s creditor process had concluded, and the promoter’s story effectively ended.