Spanish real estate group files for bankruptcy

Published: Feb 19, 2013 6:45 a.m. ET




MADRID--Reyal Urbis SA (REY.MC), a real estate company that became a stock market favorite during Spain's property boom, said Tuesday it will file for bankruptcy protection.

Reyal Urbis, born out of the merger of Inmobiliaria Urbis and Construcciones Reyal just one year before the country's real estate market crashed in 2008, said in a statement that it remains confident that, while under protection, it will come to an agreement with its creditors.

If Reyal Urbis defaults on at least part of its debt payments under Spanish law, as appears likely, it would become the second-largest default in the country's corporate history.

Reyal Urbis, owned by construction magnate Rafael Santamaria, owes 3.6 billion euros ($4.8 billion) to a group of banks including SAREB, a government-run "bad bank," created last year to buy non-performing property loans and other assets from the country's commercial banks.

Real estate company Martinsa-Fadesa conducted the largest default in Spanish corporate history, when it reached an agreement with creditors to restructure some seven billion euros worth of debt.

Besides SAREB, Banco Santander SA (SAN.MC), U.S. hedge fund Appaloosa Management and Banco Popular SA (POP.MC) are among Reyal Urbis' largest creditors.

Reyal Urbis currently has a market value of EUR35 million. Trade in the company shares was suspended earlier Tuesday; the stock last exchanged hands at 0.12 cents each.

The shares hit an all-time high of above EUR39 in December 2006.

Write to David Roman and Pablo Dominguez at Twitter: @dromanber

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