Taken from COSTA BLANCA NEWS July 18 - 24 2008
More than 1,500 properties in jeopardy in Oliva-Pego
By James Parkes
THE SUSPENSION of payments declared on Monday by Spain’s leading real estate company Martinsa Fadesa has jeopardised the construction of more than 1,500 properties in the northern Costa Blanca.
The announcement came on Monday following a stock value slump triggered by the resignation of its managing director last Tuesday, July 8. On Friday, shares of Martinsa Fadesa plummeted by 33.8 per cent in the Madrid stock exchange followed by a further 24% on Monday.
Pego is the area most affected by the Martinsa Fadesa crisis as the company is the developer of 1,175 homes in the controversial Bellarotja macro-urbanisation, which has spread across the mountains surrounding the Pego-Oliva marshes.
Mayor Carmelo Ortolá assured buyers that the company will finish the first 250 homes included in the first phase of the urbanisation.
According to company sources, the handing over of keys was scheduled for early 2009. However, employees from third companies contracted by the promoter had left the site on Wednesday.
Mayor Ortolá also said that Fadesa has sold 70 % of the land initially purchased for the project. This means that the company only has sufficient land to build between 450 and 500 homes at the most.
It was revealed yesterday (Thursday) that Pego council has speeded-up the bureaucratic procedures for the Bellarotja property title deeds to be signed.
Within the Valencia Region, Martinsa Fadesa has another two developments under construction, one in Alberic and another in Pobla de Vallbona, and in Murcia the company is building a complex in the Mar Menor and Ulea areas.
Martinsa Fadesa’s fall directly affects 12,578 families who purchased properties off-plan and have yet to see their homes completed.
Plans for an emergency reduction of staff were presented on Tuesday and affect 26.5 per cent of employees, leaving 234 people jobless.
The company also owns 28.67 million square metres of land, mainly in Spain, for future developments that may never begin.
Both Bancaja and CAM savings banks are also affected by the suspension of payments as they are owed 280 and 100 million euros respectively.
The initial report estimates Martinsa Fadesa’s creditors include 45 banks with which the company has subscribed loans for a joint amount of 4,000 million euros.
José Manuel Galindo, chairman of promoters’ association Asprima says that other cases could follow and insisted on the need for the government to study urgent measures to support the real estate and construction sector.