Light at the End of the Tunnel: Developer Habitat Will Resume Trading After Putting and End to its Insolvency Procedure
High profile developer Habitat filed for receivership in December 2008. Its receivership procedure was the second most important in Spain after Martinsa-Fadesa which filed for receivership in 2007 owing in excess of seven billion Euros.
Barely two years on, an agreement striked at the Creditors General Meeting held early on this year will reschedule Habitat’s outstanding financial commitments.
As we had explained previously, the aim of Spain’s Insolvency Act of 2003 is to allow financially struggling companies to buy time and re-arrange their financial commitments with their creditors, either by extending the loan period or by reducing the debt burden or both. The whole receivership procedure is geared towards saving these ailing companies which may be undergoing severe temporary cash flow problems.
Following the trail of developer Llanera, which also concluded successfully its receivership last year, 82% of Habitat’s financial creditors have backed the overhauled debt plan as well as by 80% of the normal creditors. The former are namely major lending institutions which constitute the bulk of habitat’s debt which tallies over a billion Euros. The latter would include off-plan buyers for example.
It is foreseen Habitat will officially exit its receivership on the 19th of April this year when the judge of Barcelona’s Company court number three will put an end to it.
The second proposal has a shorter waiting period of only 5 years but in return creditors forfeit 30% of their credit recovering only 70%.
Source: Invertia (http://www NULL.invertia NULL.com/noticias/noticia NULL.asp?idNoticia=2315979)