Spain's property firms demand debt relief from banks ? The Punch ...

The few listed Spanish property firms to survive a brutal real estate crash are stepping up the fight with banks for more generous debt relief to outlast a crisis that could yet have years to run, Reuters reported.

Companies must persuade banks that have already been forced by the government to write down property loans to cut their debt to reflect the plummeting value of the assets linked to it or simply to give them more time.

But property prices have dropped by some 30 per cent since a building boom collapsed in 2008, crippling Spanish banks that were heavily exposed to the sector.

Dozens of property companies have folded, saddling the banks with empty lots and unfinished buildings that are impossible to sell in the moribund sector.

With the market not expected to hit bottom for two more years, the country in deep recession and unemployment at 26 per cent, time is running out for firms that refinanced debt right after the crash and whose borrowings are now coming due.

?Talks are accelerating to try to resolve the property problem,? a source from a large property firm said on condition of anonymity.

Reyal Urbis, whose shares have dropped 86 per cent since a market debut in 2007, said this week it is in talks with banks to swap assets for debt of ?3.6bn in a last-minute attempt to avoid bankruptcy.

Realia, whose shares trade at about ?1 after peaking at ?6.5? in 2007, is negotiating ?1bn? of debt.

Its market capitalisation is just ?300m.

Realia and Reyal have some income-producing leases on commercial property, making them more viable.

But many smaller and medium-sized developers with assets that are mostly undeveloped land or unfinished buildings have no revenue stream and face being shut down by creditors.

Rafael Powely, a Madrid-based director of strategic consulting at property agent Jones Lang LaSalle, said the sector will be closely watching to see what is happening to property loans that are being moved into a bad bank, known as SAREB, that was set up to deal with toxic assets from the property crash.

Source: http://www.punchng.com/business/money/spains-property-firms-demand-debt-relief-from-banks/

Fox News Live Obama 2016 Who Is Winning The Election 2012 Election Coverage 2012 the blaze Linda McMahon Voting Results 2012