Just picked this up off the Simply Networking website

Polaris World, 3 month period of bankruptcy protection expires today......

2010-03-22

Polaris World went to the courts on 22^nd December to seek 3 months protection from their creditors to avoid being pushed into bankruptcy.

Today is the 22^nd March, so technically today is their last chance to salvage the company from the ashes of their former empire.

10 days ago an announcement from Polaris managagement assured the world that things were pretty much agreed and that a few "minor details" had to be confirmed before an official announcement was made about the future of the company.

Since then there has been silence.

Absolute silence.

Not a whisper in the press, not a murmur, or a comment, or an article speculating what the terms of the agreement could be. 

Nothing.

Understandably , these negotiations would have been hard, more than hard, desperate.

Polaris bit off more than it could chew with the final Condado development which has sucked cash from Polaris resources and left it drained and bleeding on the ground. Massive investment in land, infrastructure, facilities for the sale of a paltry 3000 apartments.

Many watched open-mouthed as the development began just as the property market started to slide, astonished that so much money was being pumped into the most ambitious development yet. Massive infrastructure grew from the plains,  thousands of trees were planted and a few little rows of white apartments appeared in the far corner of an enormous space.

News soon filtered out that apartment purchasers  were being offered good deals to exchange properties they had bought off-plan for those which were already built, and many started to suspect that once this first phase has been completed that no further development would be started.

As Spain slid into a property slump, the scale of the property boom meltdown became apparent, with more than a million unsold properties littering the coastline.

Polaris renegotiated a billion euros worth of debt, giving away the land purchased for the second phase of Condado de Alhama and surrendering hundreds of unsold properties to the banks, hopeful that it could continue trading. But within just 3 months they owed a further 120 million euros, ongoing expenses, wages, rents and monies owed to suppliers accumulating to push them back into a state of negative liquidity, the stagnant property market failing to yield capital to cover expenses.

Since then, they've been renegotiating to try and avoid bankruptcy.

The banks are going to play hardball, and so they should. Valuable businesses which earn money are what the banks want, not more unsaleable properties to clog up their asset sheets, they want  management companies, golf courses, resorts with completed infrastructures which function efficiently and profitably, not empty apartments.

And as the weeks have gone by without settlement being announced, the likelihood of Polaris obtaining a favourable deal became smaller and smaller.

Sources close to the action have said that a complete carve-up is inevitable, with several parties apparently interested in acquiring parts of the Polaris pie, and we've all been waiting anxiously for confirmation of who is getting what and how the new structure will function.

The big spanner in the works of course is the possibility that Paramount may build its new theme park here, in which case the assets held by Polaris, which are unsaleable now will be worth a fortune.

Some have speculated this weekend that the silence could indicate a deal with Paramount and the consortium who will build this theme park IF it happens, the Polaris assets forming part of the consortium team, but others say this is unlikely as the first stage of feasibility studies are still in progress and it is unrealistic to think that a decision of this magnitude could be made BEFORE the correct procedures have been followed.

Unless, of course, it was a done deal before Pedro Cruz, the Minister for Culture came back from Dubai, which, of course is entirely possible. With the banks offering the Condado land to the studios, it could have been in everyones minds, and big bankers move in big circles, so who is to say the banks didn't know about this studio deal before these negotiations even began.

If they suspected this could happen, and it DOES  happen, they've made an amazing, far sighted investment on behalf of their clients.

Or maybe they just got lucky.

The other possibility is that Polaris are negotiating hard, knowing full well that what they have now COULD be worth a fortune, IF Paramount goes ahead.

 Or somebody who thinks, or knows, that this Paramount deal is going to go happen,  is sticking a spanner in the works by joining the negotiations, or even purchasing Polaris outright, or maybe giving them the backing to stay liguid.

There are so many "ifs" for Polaris and this Paramount deal. News has just come in that Brussels have still not ruled on the legality of the Corvera airport bail-out plan. IF they rule it illegal it makes the case for Murcia considerably weaker as this airport is part of the big fat carrot being dangled in front of Paramount.But until they make an official ruling it's just another IF on a long list of If's.

But the clock is ticking today and the law waits for no man.

One of the Spanish papers reported the date for the official process as being the 29^th, but this is the only place this date has appeared, the dates quoted on the original court papers as three months from the 22^nd December.

It's the 22^nd March.

Watch this space.

As you will discover, the first three months are to allow the company to hold off creditors while they decide on a course of action, but history would suggest that they will now enter into a two year administration period.  Many spanish developers have gone this way trying to drag out the whole process.  San Jose started the administration process in Feb 2008 and are still in administration (not liquidation) today.

It really depends if Polaris are simply asset rich and cash poor, or  worse still, both. 

The real dilema will come if Polaris go to the wall especially regarding the unfinished developments and for those who are already living there.

i supose that all we can do is to keep our fingers crossed.

It would not come as a surprise  to find out that the banks have known about the Paamount  proposition for a long time & not informed Polaris. However I cannot believe for a moment that  some one some whee who posible has a vestage inteest in Polaris has not given them the nod.

I supose all we can do is wait

 We still have no regrets aswe havemade some greatfriends

& have had some great holidays over the past 18 months or so

Jan

http://www.laverdad.es/murcia/v/20100323/region/polaris-world-solicita-prorroga-20100323.html

Polaris World requests a month extension to finalize the deal with banks

The developer maintains a tug on the valuation of some assets 

 
Polaris World has requested an extension from one month to the Mercantile Court number two in Murcia to finalize the negotiation of its debt, said yesterday a spokesman for the company just three months when met preconcursal communication. The reason lies in the conversations you have with banks and creditors on the valuation of assets of the company should support the coverage of debt, which stands at about 83 million.

Polaris World has many assets that cover this debt, "the spokesman said via land, houses, hotels and golf courses. He added that the end will prevent the composition, which is a goal that has been marked Polaris, but that there is "a logical tug in such negotiations" and therefore every reason to hurry this new term bankruptcy law provides. Thus, we must wait until 22 April with the conviction that the agreement will be signed agreement with creditors, the source stressed.
Following 'fringe'

Polaris World introduced on December 22, a communication to the Commercial Court declared the state of insolvency of fifteen of their corporations. The company is at the expense of the revitalization of the property market and has been detected in recent days some positive signs. Within a few days has sold more than a dozen homes of their resorts, mostly to foreign buyers.
The "fringes" of the negotiations that they wanted to solve days ago still remain with some of the entities that are putting more conditions to the agreement. A renowned consultancy firm is responsible for undertaking the valuation of assets now under discussion by the parties.

Phil

Curious? This could take them to just after the decision from Paramount couldnt it? Interesting times.

I'd forgotten about the potential for going into a couple of years of administration though- that would be a period of limbo for the resorts.

Hopefully they have only asked for a month because its clear they are close to some decision.

another article which is very similar

Polaris negotiates 1 months grace with bankruptcy courts

Polaris World bankruptcy, one further months protection granted by courts

Polaris world has sought one further months grace from the Murcian courts to continue negotiations with its creditors.

The sum under negotiation is now said to be 83 million euros, much lower than the 120 million which was originally quoted in December 2009.

Polaris argues that it has sufficient assets to cover all its debts, and has contracted an independent assessor to value the assets in realistic market terms, the hard nosed attitude of its creditors seeking to undervalue them and acquire at bargain rates.

The company now has until the 22^nd of April to complete its negotiations and sign an agreement with creditors by this date, which it is adamant it will be able to do.

It says that there are stirrings of positivity in the housing market, and claims that it has sold 12 properties in the last few days, mainly to overseas investors.

No doubt the speculation that the Paramount giant may be building a theme park in the region will have encouraged one or two moneyed investors to take a gamble and pick up bargain property in the region , activity and speculation  boosting  confidence and a mood of positivity. Inaccurate reporting in the British language press has lead to the impression in many circles that this is a done deal and is definitely going ahead, which of course it may be, but logistical and viability studies are still in the early stages and as they say, "there's many a slip twixt cup and lip, " and until official announcements and financing are agreed nothing is definite at all. At the moment no-one even knows where the park could be located, although several municipalities are staking their claims.

One month of grace could make all the difference to Polaris as the preliminary findings will have been made public, and we'll all have a better idea whether Polaris could be in the right place at the right time to make a fortune from Paramount, or whether it has to concede  defeat and hand over its most prized assets to creditors.

In the meantime, negotiations continue apace, with Polaris fighting to achieve the full value of its assets, and the banks determined to get the best return on an investment they hadn't anticipated having to make when they lent money to the constructor in the good faith that it would be repaid.

22^nd April, let's see what happens

Seems to be a new twist and turn to this saga every month.

Just like a good movie...

Why not wait until there is an official announcement, instead of trying to second guess what will happen.  When it comes to PW, the local Spanish Government or Paramount we will certainly be the last to know.  I certainly wouldn't be believeing what the papers are saying either.

Polaris World, 8 day countdown to bankruptcy deadline

Polaris World bankruptcy, just eight days until April 22nd deadline 

2010-04-14

There are now just 8 days to go before Polaris World is forced to make an announcement about its' future, as this is all the time it has left to negotiate a solution to it's financial problems or be forced to enter into a state of voluntary bankruptcy.

It originally went to the courts on the 22^nd December to seek 3 months protection from it's creditors to enable it to renegotiate its' debt, then was granted one further month on 22^nd March, but the law provides no further shelter and by the 22^nd April it must have the situation resolved one way or another.

There's very little firm information to be found about exactly what is going on at the moment, and surprisingly little speculative musings in the press, all that is known for definite is that Polaris is frantically letting staff go, closing offices, and trying to close deals which will sell off various parts of its empire to different parties, effectively carving up the empire into lots of little pieces.

The level of debt is still not clear. Figures were quoted in December of 110-120 million euros, owed mainly to the big four, Bancaja, CAMbank, Banco de Valencia and Banco popular, who are owed approximately three quarters of the outstanding figure, the rest to smaller creditors, Cajamurcia and Cajamadrid, although the figures being quoted at the moment are 90 million , 83 million and 88 million.

More than a billion euros worth of re-financing was arranged last autumn when property was exchanged for debts, which left the big banks holding 6 million square metres of land which had been zoned for building ready to expand into Condado de Alhama 2 and a plethora of other properties, under the name of the IRM, Iniciativa Resort Mediterranea. ( Banco de Valencia, Banco Popular, Cajamadrid, Cajamurcia, Caja Mediterraneo.)

Since this renegotiation, Polaris ran up these further debts due to the operating costs of maintaining offices, sales staff, and basic operating costs, costs which it is now desperately trying to reduce and shed.

We have been told by various sources that many of the assets and companies have been sold or that deals are on the verge of completion.

Although nothing can be officially confirmed, rumours abound that deals on the petrol station and  supermarkets have been  concluded, with others agreed on the golf courses which are completed and have a hotel already in place as well as several smaller associated businesses.

Unsold property stock, estimated at around 450 million is to be taken on by the banks, although the big sticking point on this is valuations.

Polaris optimistically announced on 23rd March that it had sold 12 properties in the few days preceding the March 22^nddeadline and that stirrings in the property market were creating a new mood of optimism in construction circles.

This optimism , however, was all based on the excitement that Paramount studios were considering Murcia as the site for a new leisure complex and theme park, a possibility which lead those with a few euros to spare into a spot of speculative purchasing, but the bubble seems to have burst as Paramount have since announced that they have no interest in building a theme park in the region, although government sources say that viability studies are still in progress for the construction of a leisure facility.

The big problem Polaris have faced this month is the valuation of their property assets. Property prices have fallen since last year, although banks and agents have wildly differing statistics for the percentage by which properties have devalued.

Some agents openly say they are selling the bargains, with canny purchasers renting until someone is desperate and snapping up properties at 35% reduction on peak values, and banks are openly offering properties at this level of discount in public auctions and in special property exhibitions throughout Spain, particularly properties at the lower end of the quality and desirability scale.

The government are still trying to maintain that pieces have  fallen by less than 10% since their peak, although say that to an estate agent and they'll raise their eyebrows and mutter something along the lines of they'd be happy to be able to sell anything at that sort of discounted price.

Polaris don't want to give it all away for nothing, although as the days count down and the deadline of the 22^nd April approaches, it's increasingly a question of how much they can sell off before being forced to settle on a figure way below their expectations for the remaining balance.

8 days and counting.

There's nothing new in this information which is as Simply Networking report.

Spanish Property Insight had also reported similar on Tuesday 13th

'Murcia-based Polaris World, Spain’s biggest holiday home and golf course developer, has now run out of room for manoeuvre. A deal must be reached in the next 10 days or the company, controlled for the time being by Pedro Maroño and Credit Suisse, has to file for court protection.

Slashing costs

Eleconomista reports that, in the meantime, the company is desperately trying to slash costs by shrinking its structure. It is reportedly liquidating 50 of the 70 companies in the group, selling all non-core businesses to raise money and focus on development.

What happens if PW go into administration? Well, for a start, there will be another wave of buyers trying to get out of their purchase contracts, which will just aggravate the company’s financial difficulties.'

Clearly PW are playing their cards close to their chest at the moment.

2 days to go and the signs aren't good.

Went to sales office today to collect a key as arranged last week. They normally have someone here every Tuesday. It was locked up at 11.30.

Happened to being going by Balsicas head office so called to customer services. Doors again locked and various boxes piled inside the entrance - obviously abandoned.

Then went to head office sales and was told keys were coming from Condado to H.O. maybe today. Everyone was being consolidated at sales office in Balsicas but she could not give me a contact phone number.

Got call later saying keys wouldn't arrive till tomorrow so we asked to collect ours at Condado before they went to Balsicas. Was told it was not possible. 

Asked for her phone number but she said she did not have one and she was calling us!

Saw Olga outside who was the girl based here on Tuesdays - surely she would know where they were and in which drawer?

But all we got was a stoney no comment.

Also been told a marshal and girls in golf shop have not been paid.

Will be interesting to see information on Thursday!

Barry

Not looking good Barry is it. Hope water stays on and course remains open!!!

This all makes sense as I have been trying to get a response from Polaris Homestyle for the past 3 weeks and to date no response has been received. No doubt they are also in the process of releasing all staff. Whilst I appreciate this is all blamed on the global recession, Polaris in my opinion had within their gift a potentially very strong business model that has just been put to waste. I am sure that many people agree when I say that some of the more basics such as delivering excellent customer service, ongoing customer care and more robust marketing  would have gone a long way to their success if the right people were in post as opposed to the lazy bunch of uncommitted people that I have had the misfortune of dealing with from day 1. I personally hope the Paramount thing comes off as the American agenda will surely focus more on this type of service as opposed to the Spanish way of doing business. The way in which Polaris have operated is totally unacceptable and until more measures are put in place to protect the end customer from a Spanish law perspective the better.

Anyway I am off to plan a golf course now in the farmers field behind me that incidently will be designed by Tiger Woods. If anyone is interested in any frontline apartments these will start at £500k. How can businesses get away with the constant mis-selling through providing untrue marketing campaigns. It makes me sick!!  

Doesn't surprise me at all as we have been getting the run around on €500 that was to be paid to us in September.  Bounced cheques and delayed bank transfers etc etc.

No matter what happens to Polaris I would never recommend them to anyone I know.  Even though I think Condado is a great place and could be become a top class resort...the grief of dealing with Polaris is not worth it.

I realy do not think that any of you have"Got it"

Yes we are all in the doldrums about the future of Condado

But as usual people are blaming Polaris

If a company anywhere , America , the UK or spain, suffers financialy no one gets all the answers

 the staff are often owed wages & cannot help customers with their questions because they dont have the answers

.Polaris is not the only company that is in the proverbial Sh** @ the moment

I am sure this current financial  crisis came as much of a  surprise to the directors as it did toi all large & small  companies

around the world.

I know you are frustrated. But when the fault of this world wide delema is not caused b ythe Spanish  but through  the gread of the banks in another country. I think it is them you need to vent your anger about.

I am a great believer in fate & have a great belief that it will all turn out ok in the end

My views are actually based on several dealings with Polaris over the last 2 years rather than just the last few months and their current situation.

I don't blame Polaris for the mess the world is in today and they were probably unlucky that they didn't start Condado 3 years earlier.

In saying that their overall level of customer service, while being polite, is severely lacking.  Once they have what they need there is little urgency.  I'm not talking about the various things that were promised in the resort or changes that were made, buying off plan you accept that things like that will happen.  I am talking about issues that squarely fall on the reponsibility of Polaris to resolve/fix.  You get told they will be done and 1 month, 2 months later nothing has been done.

That is why I would not recommend Polaris.

I can't believe anyone can defend Polaris after sales customer service and the treatment of its employees.

I the UK we are used to customer service being paramount (excuse the pun!) .

Having been a distribution manager for Argos I was well aware my own and colleagues jobs depended on making the customer happy. Every customer service issue was measured and any fall in standards was rapidly addressed.

We all know that businesses in Spain are manana and are 20 years behind us but that does not excuse the 'I'm alright' attitude of staff in Polaris World which is a big company by anyone's standards.

Direction comes from the top and the general attitude of most Polaris employees suggests they haven't got any.

Yes Polaris have been badly affected by the recession but there have been so many examples of how they have failed to take advantage of profit making opportunities it is unbelievable.

When the course was ready in November they had failed to get the relevant documents from the golf federation to open it for a further 6 weeks.

Driving range not open when they only needed a ball machine

Good Friday they knew the resort would be full of visitors yet the restaurant only had 3 staff.

Pricing policies in the bar and gym have been prohibitive

And lots more examples that you all can think of.

 Barry

Just reading on the Community Website that the Foro/Al Kasar will fall into the hands of the banks (as will the Sportszone).

Hopefully this will mean more units are occupied in the coming year (and customer service is improved).  Milenium also looking into possibility of the Sportszone coming under the control of the community.

Yep,

Hopefully this will just mean a change of "landlord", with the units now paying rent to the bank rather than Polaris.

There is a presidents meeting this afternoon, if we get any further information this will be posted on the community site.

Phil

Having had my own business & knowing that  good customer service is vital to its sucsess.

I have to agree with points made by Barry

But I also believe in saying it as you find it

We also bought off plan & have to say  Polaris has always come up with the goods.

Carol Millar our property manager informed us of the damp caused by the heavy rains on two seperate occasions.

She advised me to email Olga &  between them the workmen were able to get on with the job.

So we really do not have any thing bad to say about Polaris.

Jan