Colonial’s Rival Bidders Await Shareholder Vote on Restructuring

Shareholders of Inmobiliara Colonial SA (COL), Spain’s largest publicly traded developer, will vote today on a proposal by a group of investors led by Grupo Villar Mir to invest in the company through a capital increase.

A rival offer by a fund owned by Toronto-based Brookfield Asset Management Inc. (BAM/A) to restructure Colonial’s 1.8 billion-euro ($2.4 billion) syndicated loan, of which Brookfield holds 46 percent, won’t be put to shareholders, according to regulatory filings.

Colonial, which owns office buildings in Madrid, Barcelona and Paris, has struggled with mounting losses and debt from its expansion during the real estate boom in Spain. The company is asking shareholders to approve a 1 billion-euro capital increase and has commitments totaling 500 million euros from investors including Grupo Villar Mir and Grupo Santo Domingo, the company said on Jan. 2.

Brookfield’s proposal includes selling Barcelona-based Colonial’s stake in French real estate investment trust Societe Fonciere Lyonnaise SA, the company said Jan. 16. The fund would be prepared to help increase capital and to make a full takeover bid for Colonial if Spain’s stock market regulator requires it to, Brookfield said in its offer.

“We’re the largest creditor in Colonial and we are very interested in the result of current discussions over the company’s restructuring,” Brookfield said.

Grupo Villar Mir bought a 19.3 percent stake in Colonial, the company said on Jan. 14.

Colonial’s nine-month net loss widened to 369 million euros from 201 million euros a year earlier, the company reported Nov. 14. Net debt stood at 3.49 billion euros, according to the filing.

To contact the reporters on this story: Katie Linsell in Madrid at klinsell@bloomberg.net; Sharon Smyth in Madrid at ssmyth2@bloomberg.net

To contact the editors responsible for this story: Shelley Smith at ssmith118@bloomberg.net; Andrew Blackman at ablackman@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.