Spanish property company Renta Corporacion has sold EUR 380 mln worth of property assets since the start of the year as part of an agreement with banks to refinance EUR 500 mln of long-term debt. The group, which posted a loss of EUR 111.5 mln in 2008, said its debt has almost halved to EUR 316 mln as a result of the operation, from EUR 695 mln at year-end.
Spanish property company Renta Corporacion has sold EUR 380 mln worth of property assets since the start of the year as part of an agreement with banks to refinance EUR 500 mln of long-term debt. The group, which posted a loss of EUR 111.5 mln in 2008, said its debt has almost halved to EUR 316 mln as a result of the operation, from EUR 695 mln at year-end.
'In an atmosphere of confidence in our business model the financial institutions have provided us with much needed stability in the short and long-term, crucial in today's market to get over the current crisis. The success of the deal it is been possible mainly because all parties involved made a maximum effort to be flexible at all times. Now we herald the new business cycle on a more secure financial footing,' said Juan Velayos, Renta's CEO.
The company said it has sold land and buildings including its headquarters in Madrid for a total of EUR 380 mln. The creditor banks bought part of the assets as part of the refinancing deal, it added.
The agreement with the banking syndicate, which consists of a total of 17 financial institutions, is for a new seven-year syndicated loan of EUR 254 mln. Renta said that the first two years (2009-2010) will be a 'grace period', with increasing annual repayments from 2011 to 2015.
Renta said that it has made 36% of its total headcount redundant since mid 2008 as part of a programme to reduce costs. Staffing levels fell from 139 staff in June 2008 to just 89 people at present. '2008 has been a difficult year and Renta Corporación had to make key decisions in order to guarantee viability for the company's future,' the group said.
