Spanish real estate firm Colonial suffered a EUR 2.38 bn loss in the first half of 2008 because of falling asset values amid Spain's housing market crisis and increasing borrowing costs. In a statement, the company said that the asset writedowns were attributable to 'extraordinary impairment losses' for investments in its retail unit Riofisa and construction firm FCC.
Spanish real estate firm Colonial suffered a EUR 2.38 bn loss in the first half of 2008 because of falling asset values amid Spain's housing market crisis and increasing borrowing costs. In a statement, the company said that the asset writedowns were attributable to 'extraordinary impairment losses' for investments in its retail unit Riofisa and construction firm FCC.
The firm also said on Sunday it has reached a preliminary agreement with creditor banks to restructure its debt which amounts to a total of EUR 9 bn. It added that it hoped to reach a final accord with the banks Calyon, Eurohypo, Goldman Sachs and Royal Bank of Scotland in early September. Earlier this year a group of eight banks took partial control of Colonial when its majority shareholder and former chairman Luis Portillo failed to meet debt obligations.
In a statement, Colonial said that its portfolio is valued at EUR 10.5 bn, of which around 83% corresponds to rental business assets. The company said it plans to continue reducing its exposure to residential development and land activity while focusing its business entirely on property management.
