Santander puts for sale its credit exposure in Hesperia

Santander is negotiating the sale of its credit exposure on the Hesperia hotel group, a 136 million euros loan portfolio, with with several opportunistic funds, such as Apollo, Bain Capital and Bybrook.

According to the Spanish journal El Confidencial, the bank has already received offers for this loan portfolio, which includes eleven of the group’s hotels and offices as collateral.  Led by Santander itself, the transaction is not expected to be heavily discounted, as the loans are up to date with payments. 

The sale represents Santander’s exit from Hesperia’s credit pool. One of the largest hotel groups in the country, in 2014 the company controlled by the Galician Castro Sousa family had to sell assets to meet bank requirements to refinance debt, at a time when the bank was already Hesperia’s main financier. 

At the present, Hesperia is awaiting approval from the State Industrial Ownership Corporation (Sepi) for a 55 million euros aid package to deal with the effects left by Covid-19, which has the tourism and hotel sector as one of the main victims. Specifically, last March the group joined other hotel companies that applied for aid from the Solvency Support Fund for Strategic Companies managed by the Sepi with European resources.

Hesperia has a portfolio of 28 hotels in Spain with a total of 4,500 rooms, as well as four establishments in Venezuela. The group’s expansion plans for 2021 have so far focused on Latin America and the United States. In 2019, Hesperia posted revenue of 137 million euros, in line with the previous year, and made a profit of 15.5 million euros, up from 22 million euros in 2018. 

In recent months, transactions have been carried out on hotels operated by Hesperia on a leaseback basis. In July, the Grifols family, through the company Scranton, acquired the Hesperia Presidente hotel in Barcelona, located on Avenida Diagonal, for 125 million euros (including CAPEX). Likewise, in March 2020, the fund manager Meridia acquired the Hesperia Barcelona del Mar hotel, located on Calle Espronceda in the Catalan capital.

Original Story: Eje Prime | News
Photo: Facebook Santander
Edition & Translation: Prime Yield