SPAIN - Metrovacesa SA, Spain's largest property firm, has handed over majority control of the company to six of its creditor banks in exchange for debt.

The Sanahuja family, which owned approximately 85% of the company's assets, agreed last December to swap a 54.7% stake in the company for €2.1bn of debt, after recording losses of €738m for the year.

The creditors - Banco Santander, Anida Operaciones Singulares, Banco Espanol de Credito, Banco Popular Espanol, Banco de Sabadell, Caja de Ahorros y Monte de Piedad de Madrid - had until Friday to fulfil the agreement and receive the 38.1 million shares.

Banco Popular, Banco de Sabadell and Banco Santander have agreed to buy an additional 7.5 million shares for €57 each, or 10.8% of the company, giving the creditors two-thirds of the firm.

Metrovacesa has also given the banks the option of buying more shares at the same price over the next four years.

The firm announced on Friday it lost €738m in 2008 as a result of the collapse of the Spanish real estate market and steep decline of its commercial property values. On 31 December 2008, the firm's total income for the year was approximately €1.42bn.

Metovacesa had €6.05bn worth of debt at the end of 2008, down almost €950m from last September, as the firm has been concentrating on reducing its debt and raising liquidity by selling its assets, including three office buildings, five commercial centres, two large shopping centres and various accommodation properties.

It has also reduced the number of development projects under way and currently has 12 projects in its portfolio compared to 19 predicted at the start of the year. The projects put on hold include the Valdebabas shopping centre and the Monteburgos office block in Madrid.

The company also reached an agreement with Legal & General to extend the £240m (€273.3m) payment for Walbrook Square until October 2010.

Metrovacesa sold HSBC back its headquarters in Canary Wharf, London for £838m in December, which cancelled out the £810m loan HSBC gave the firm for the purchase but in turn generated a loss for the Spanish firm.

Metrovacesa's gross asset values currently stand at €10.1bn.

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