Now Reading:

Spanish property downturn claims Martinsa Fadesa


Spanish property downturn claims Martinsa Fadesa


One of Spain’s biggest property companies, Martinsa Fadesa, has declared itself insolvent and will now start selling assets to repay creditors. That follows the bursting of the Spanish property bubble last year from slumping prices due to oversupply and rising borrowing costs.

The company was unable to get a 150 million euro loan as part of a refinancing agreement for a big chunk of its 5.4 billion euros of debt.

Martinsa-Fadesa is not just active in Spain; it has projects in 15 countries, particularly Eastern Europe and Latin America. It has a vast portfolio of property and its assets are estimated to be worth 10.8 billion euros.

In the recent past, when Spanish builders have got into trouble their creditor banks have swapped debt for equity, but a spokesman for the Property Industry, José Manuel Galindo, said that is not the answer: “ I believe that we in the property business and the banks must try to avoid bankruptcies like Martinsa-Fadesa’s because it doesn’t benefit the banks to become owners of property companies.”

The announcement of one of the biggest corporate failures in Spain’s history had a major effect on the country’s shares. Other property companies dropped, as did banks which said they would suffer an initial 350 million euros of writedowns related to the company.

More about:

Every story can be told in many ways: see the perspectives from Euronews journalists in our other language teams.

Next Article