Murcia Today article. Do we need to be worried?

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08 Nov 2013 1:39 PM by LizF Star rating. 13 forum posts Send private message

Has anyone seen the article in Murcia Today about IRM going bankrupt and if so, do we as owners on Condado need to be concerned?

I have tried to copy a link to this thread but it was not allowed.




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08 Nov 2013 2:17 PM by ptan Star rating in Los Naranjos Jardine.... 1696 forum posts Send private message

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this was mentioned on a thread last month but people were too busy bickering to take any notice. IRM entered backrupcy protection at the beginning of Oct, will it effect tge resort? well I'm told that they havent paid their community fees for six months!

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08 Nov 2013 5:15 PM by faulky444 Star rating in Rossendale, Lancashi.... 399 forum posts Send private message

For me the big threat is to the continuance of the golf course as a going concern. Without that the resort would struggle. I don't play golf but value the aesthetics and would hate to see that become a wilderness. It may be at some point we may need to consider taking over the running of the course until a buyer could be sought. That would cost but is by far a better option to losing the course which is a gem.

That's the pessimistic view, I actually can't believe any financial institution would consider losing something that is as developed as CDA and golf course currently is and if Paramount does eventually get going, then CDA and the golf is the only thing that the bad bank actually owns that may sell. That said, it was the banks that got us into this mess and we are in Spain where logic and sense do not prevail. JF.


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08 Nov 2013 5:24 PM by Danseex Star rating in Los Naranjos J4 n253. 652 forum posts Send private message

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The community could never take over the golf course it would be financial suicide, the amount of money it must be losing is obscene, look at the debts the banks have accumulated in a short space of time, I fear without a proper clubhouse it could be doomed, but then who's gonna invest in a golf course that is losing money, catch 22, sad times.....

 


This message was last edited by Danseex on 08/11/2013.


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08 Nov 2013 5:39 PM by shampers Star rating in Warrington & Jardin .... 1057 forum posts Send private message

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Maybe Jack Nicklaus would ................



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08 Nov 2013 5:57 PM by faulky444 Star rating in Rossendale, Lancashi.... 399 forum posts Send private message

I'm talking about a social enterprise type of situation where we don't spend anything on the course but just run it. With a different marketing structure and attitude to customer care, it would make money enough to keep it going. It loses money currently not because of the running costs, but because of the ridiculous financial regime that lies behind it.


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08 Nov 2013 6:03 PM by igw Star rating in East Lothian. 81 forum posts Send private message

We are told that Nike recently joined forces with IRM.  I can't imagine they would enter into a partnership, joint venture or whatever it was without some elementary checks that the new 'partner' wasn't on the brink of going into administration.  So, if the reports are true, one assumes that Nike knew and it wasn't a concern for them.

Logic would therefore suggest that all that is happening is that IRM as a company is going to disappear (along with its debts) and the new legal entity (joint venture) will take over.

Others who know better than I about Spanish business practice may wish to pass comment on whether it is safe to assume logic will apply in this case.

Interestingly, although there are many comments to be found on Google about the creation of the 'partnership', I can't find any which originate from Nike itself.  I'd be more comfortable if someone could provide a link that shows otherwise.




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08 Nov 2013 6:09 PM by BFR Star rating. 217 forum posts Send private message

Totally agree Faulky. That course could easily make money with the right people behind it. The Society must plow thousands in for starters.




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08 Nov 2013 8:07 PM by hamibabe Star rating in West Mids. 1317 forum posts Send private message

As a non-golfer the only thing I have noticed over the years is the lack of constructive marketing but then I might not be looking in the right magazines etc. Early on we did think of putting an ad in one of the popular golfing magazines as there had been a great write up about Condado`s golf course. I still pop into Smiths & have a quick look inside the monthly mag but to my knowledge Condado has never been mentioned since.

Jack Nicklaus is a name that should encourage magazines to write articles about & a mention of Condado would surely be included. This type of coverage is free & there`s nothing better than free publicity. 

So who is in charge of marketing? Please don’t say no one cos I for one will not be happy. The right type of free marketing & networking (which is also virtually free) is the way companies grow.

Despite the current financial climate I have watched many small & medium sized businesses grow over the past four years by using these methods

So what is happening?

Jan

 

  

 


This message was last edited by hamibabe on 08/11/2013.

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08 Nov 2013 8:51 PM by Redrose Star rating in Norwich. 233 forum posts Send private message

If IRM havent paid their community fees for 6 months how did we afford the 17900 Euro we paid for the new lean to over the mailboxes at the Jardines???

I thought money was already tight before IRM stopped paying!!!


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09 Nov 2013 9:59 AM by silverfox Star rating in kent england and La .... 94 forum posts Send private message

I have read this article with interest, as it would affect all resorts, but my understanding is, that the IRM, is made up of several banks, and they have tried to sell of the various plots, apartments, and land, but are asking to much money, now the SAREB which are made up of only 3 of the banks, are forcing this bankrupcy, so they will in effect own 100%, there for be able to sell of these assest, at lower price, and then hopefully, a more professional company wil see the protenal, and we will see the golf corse, and the resort thrive, but this is only my understanding, so my be totally wrong.

Michael and Yvonne



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09 Nov 2013 10:57 AM by ptan Star rating in Los Naranjos Jardine.... 1696 forum posts Send private message

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sorry but IRM do not own any apartments. they do own the golf courses, shops and unbuilt plots unfortunately these are making a lose. until now the banks gave been financing these loses, IRM owe 630million, but in oct sareb to who irm owe 310million refused to loan them any more money forcing them into backruptcy protection. Will this be a problem in the long term? from what I hear maybe not. the local opinion is that sareb will take over the assets which maybe a good thing. sareb took over HDA and things there sewm to be improvibg with the course now offering better deals to get players and mwmbers in. there could be short term issues as IRM pay both fees to the community for al kasar, the condado club etc and Urban entity fees for the outer road, garbage collection etc etc and if they are not paying their fees then where is the money coming from to pay the service companies.

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09 Nov 2013 12:29 PM by shampers Star rating in Warrington & Jardin .... 1057 forum posts Send private message

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So all the outlets in Al Kasar & The Condado Club area are paying their rents to IRM but IRM aren't paying their fees back to the community !



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09 Nov 2013 12:31 PM by heslop001 Star rating in Jardin 7 J735 Ready .... 151 forum posts Send private message

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A reader has emailed asking if rumours that the IRM Group have gone into liquidation have any foundation.
The rumours stem from an article in El Confidencial published on 10th October, which state that the IRM group had entered into “concurso voluntario de acreedores”, which is a voluntary pre bankruptcy agreement, with debts of 630 million euros.

The IRM Group was formed in 2009, when the implosion of the construction sector which began in the first quarter of 2008, started to impact on the financial stability of the Polaris World group.

Polaris World was one of the most important developers along the Mediterranean coastline, building several prestigious residential urbanisations in the Murcia region, beautifully landscaped urbanisations which offered a safe and exclusive environment for “residential tourists” and second home owners, with well equipped facilities, attractive town centres and top level golf courses. The initial urbanisations were completed following an American urban model and rapidly sold out, spurring the company to continue advancing with further developments, but as the rate of building progressed, the quality started to deteriorate and by the time the property downturn began, Polaris was caught with incomplete urbanisations, unsold properties and a vast landbank of speculative plots acquired for a future expansion which was looking increasingly unlikely to actually ever take place.

As the property bubble imploded, the company decided to try and continue building, switching its resources to the Condado de Alhama urbanisation, completing the golf course, a vast perimeter ringroad, and a huge commercial centre, designed to cater for over 30,000 residencies, but only completed the initial phase of 3000 properties before the economic crisis took hold and the company found itself facing financial cashflow difficulties.

As sales slowed, costs continued to rise, financing the outstanding loans a crippling burden which revenue from the existing urbanisations and new sales was unable to finance, and the company found itself facing the very real prospect of bankruptcy.

The main loans belonged to the CAM, Bancaja, Banco de Valencia and Banco Popular, and following intense negotiations, assets belonging to Polaris were transferred to the ownership of the banks in lieu of payments, who in turn created the IRM group (Investments in Mediterranean Resorts) to manage the assets which had formerly belonged to Polaris.

This cleared debts of around 100 million euros, run up by Polaris owned companies: El Valle Golf Resort, Polaris World Sports Centre, Polaris Desarrollo, Hacienda Riquelme, Polaris World Development, Polaris World Alquiler de Maquinaria Industrial, Polaris World Hormigones, Polaris World Real Estate, Hacienda Verde, Nicklaus Golf Trail, Mar Menor Golf Hotel, La Torre Polaris Hotel, Centro Comercial El Oasis de Alhama, Oasis Polaris Ciudad, and Alhama Golf Resort.

Within a year the assets swelled yet again as Grupo Polaris failed to meet the next set of bank repayments, the IRM group slowly gaining the lands upon which the subsequent phases of the Condado de Alhama were to have been built, apartments which had already been constructed, the golf courses, some of the hotel assets and some of the retail assets owned by Polaris.

The plan was to manage the assets until they could be sold, but the continued general downturn suffered by the property sector made that option impossible to achieve without losing money on the assets and the much hoped for sale to the Premursa group of lands for the Paramount Murcia Theme Park failed to materialise as the price was too high for Premursa, who settled on an alternative plot of land. Since then, the failure of Premursa to obtain the necessary financing to initiate construction of the park has made it more difficult to obtain a good price for what is essentially potentially valuable building land nearby leaving IRM with assets and no cashflow.

This has been compounded by the financial standing of the bedfellows themselves, and the fusions and takeovers which followed the financial meltdown of the banking system. The CAM was acquired by the Grupo Sabadell, Bancaja become part of Bankia and Banco de Valencia was bailed out by the government. Finally the Spanish government created the SAREB, the Sociedad de gestión de Activos procedentes de la Reestructuración Bancaria (SAREB) “the society for the management of assets proceeding from the reconstruction of the Banking System,” better known as the “bad bank “ or “banco malo”. This absorbed the toxic property debts of cajas and banks, amongst them 309 million euros worth of assets transferred into the Sareb from Bankia and Banco de Valencia as well as participation loans totalling 581 million.

The current situation is that the capital of IRM is divided as follows: 164 million Sabadell, 144 million Bankia, 137 million Caixa ( Banco de Valencia), 124 million Popular, and Sareb 12 million, but the financial debt is 309 million to the Sareb ( 167 from Banco de Valencia and 142 from Bankia) while the Sabadell has 185 and the Popular 136.

Under the terms of Royal Decree-Law 1559/2012, which established the bad bank, Sareb has priority over the claims of its partners, which means that its own claim will be satisfied ahead of those of the Sabadell and Popular. The Sareb is charged with maximising the returns on its assets in order to make a profit for the banks and bodies which have in turn, invested into its creation, so has a responsibility to be hard nosed and ruthless when fighting to regain the money it in turn, is owed.

What this effectively means, is that the Sareb has refused to continue refinancing the IRM group, forcing it to enter into a state of voluntary bankruptcy protection.

This gives the IRM group 4 months in which to renegotiate and reach a settlement, but given the remit of the Sareb and the fact that Mediterranean property has devalued by more than 40% since the assets were first put into the IRM group to create it, it looks unlikely that anybody will emerge from the negotiations with anything other than the Sareb, which has first right on its claim.

Given the devaluation mentioned above, and the fact that the debt to the Sareb is more than half of the total assets, this means that the Sabadell and Popular will probably lose most of their money and the ownership of all the IRM assets transfer to the Sareb.

The bankruptcy protection was entered on the 9th October, so there are three months remaining before the Sareb can force the IRM Group into liquidation. This will simply mean that all outstanding assets will be owned by the Sareb, who will continue to seek ways of maximising its assets, manage what it owns and continue to try and sell off the properties and lands which it owns, exactly the same as the IRM Group has been trying to do up to this point.

In the meantime Grupo Polaris is left virtually naked, having been forced to sell assets to finance its constantly hungry debt, and seek ways of saving money, hence the temporary closure of the Intercontinental Hotel for the Winter season on the La Torre Resort and the sale of land on which the nursery for landscaping had formerly been situated for fruit tree growing, as well as the sale of other land which had been earmarked for the extension of the Condado de Alhama resort, which will also return to agricultural use.

So this is where the information has seeped out from originally and no further information has been published as far as we can ascertain, any subsequent articles all quoting the piece in El Confidencial on the 10th October.




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Kev & Sandra Heslop www.theluxurylet.com

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10 Nov 2013 8:06 PM by croham Star rating in croydon. 32 forum posts Send private message

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