One of Spain's major developers, Martinsa Fadesa, has filed for voluntary administration after failing to renegotiate a €150m (£119m) loan earlier this week. The company reportedly owes The debts of around €5bn (£3.98bn).
company said in a regulatory filing that it had lodged a petition for court administration, marking the start of Spain’s largest bankruptcy process since the introduction of new rules in 2004.
It follows the rescue in March of Immobiliaria Colonial by by creditor banks, which swapped debt for equity held by the controlling shareholders in Spain’s second-largest property company.
Martinsa Fadesa is the latest in a long line of Spanish property companies to run into difficulties, following the collapse of the Spanish housing market last year, after a decade or so of booming activity. Many small construction companies and property developers have either filed for protection or been absorbed by larger groups. The number of companies entering administration this year has more than doubled compared with 2007, according to lawyers.
“Filing for voluntary administration is the best way to avoid aggravating a crisis situation that could become irreversible and have serious repercussions on creditors and all shareholders' interests," said a spokesperson. "The company, along with its administrators, will from now on focus in revenue-generating, through the sale of assets and land management and restructuring the company so the project can be revived.”