Spanish real estate company Colonial has reached a binding agreement with its banks to restructure its EUR 7 bn mountain of debt. In a statement on Monday, the company said that banks Calyon, EuroHypo, Goldman Sachs and Royal Bank of Scotland have agreed to extend the maturity date on a EUR 6.5 bn financing facility to five years. Some lenders of privately arranged loans accepted company assets as repayment.
Spanish real estate company Colonial has reached a binding agreement with its banks to restructure its EUR 7 bn mountain of debt. In a statement on Monday, the company said that banks Calyon, EuroHypo, Goldman Sachs and Royal Bank of Scotland have agreed to extend the maturity date on a EUR 6.5 bn financing facility to five years. Some lenders of privately arranged loans accepted company assets as repayment.
Colonial will sell 33% of its majority stake in French unit Société Fonciére Lyonnaise (SFL) as part of the agreement. The Barcelona-based company also plans to sell its 15% stake in builder Fomentos de Construcciones y Contratas (FCC) as well as part of its shopping centre development unit Riofisa. The funds raised by the disposals will be used for the repayment of the new loan. Colonial spent over EUR 3.5 bn in the Riofisa and FCC stakes in 2006 and 2007.
The company said that it will ask shareholders approval to sell EUR 1.4 bn of convertible bonds. Some lenders and shareholders have agreed to purchase EUR 1.3 bn of the notes, which will be convertible into Colonial shares at a fixed ratio of EUR 0.25 and will have a maturity of 5.5 years.
Colonial plunged to the lowest level in six years on Madrid trading, falling by 16% in the morning to 26 cents per share. The shares closed at 27 cents per share on Monday, down as much as 12.9%.
