I think this is from the OPP newsletter.
GRUPO SANCHEZ SUSPENDS ITS DEBT PAYMENTS
Spain, debt, developer, Grupo Sanchez, Brazil
Spanish developer Grupo Sanchez has applied to courts in Barcelona for a ‘concurso voluntario’, or judicial help to manage its debt, as the credit crunch makes raising funding to develop its projects harder to come by.
The company told OPP that although it currently has approximately €95.2million worth of debt, €70.4million of this is tied up in bank loans for Spanish developments and is secured with land and construction guarantees in Caja Madrid and Caixa Catalunya.
Commercial and marketing director Charles Garcia explained that, despite rumours sweeping internet forums, buyers’ deposits on its flagship resort in Natal, Brazil were completely safe as they were backed by a bank guarantee.
“Natal is not affected,” he said. “Just the Spanish developments we are involved with. The Brazilian project is still completely alive. We have planning permission and are close to starting construction. Brazilian banks have been helping to finance the project and Grupo Sanchez likes to keep the Brazilian and Spanish sides of the businesses separate.”
The Elegance Natal Golf Development, bought into by Brazillian footballer Ronaldo and Hollywood actor Antonio Banderas is the company’s biggest project, attracting many international buyers to invest off-plan. InSpain, the company develops property on the Costa del Sol and the Costa Blanca.
Garcia added that due to a “temporary cash flow problem” Grupo Sanchez’s main project in Malaga, Elegance Doña Julia, has been suspended for the short-term until it can renegotiate its debt with local financiers.
“Things are blocked on certain projects. We are negotiating with the banks that provided the finance for the developments to go forward. For Doña Julia, phase one is complete but we will not release it until we have secured funding from the bank for phase two and they give us the green light.
"In Spain it is very tough at the moment and many developers are facing liquidity problems. A newspaper report said recently that of the €16billion in developer debt currently being re-negotiated in Spain, Colonial, Habitat and Martinsa Fadesa are re-negotiating €13billion worth of it. Our amount is small in comparison. At the end of the day, all deposits for Grupo Sanchez developments in Spain and Brazil are protected by lawyers and the buyers’ money is completely safe.”
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