June 18 (Bloomberg) -- Spain’s bad bank sold plots of land to Castlelake LP for 60 million euros ($81 million), about 25 percent less than their face value, two people with knowledge of the matter said.
The Minneapolis-based private-equity firm purchased sites that are part of a portfolio called Project Crossover, said the people, who asked not to be identified because the information is private. The portfolio includes sites ready for construction in Madrid, Barcelona and on the Spanish coast.
Spain set up the bad bank, known as Sareb, in 2012 to absorb 50.8 billion euros of real estate assets from lenders including the Bankia group that took state aid after the property market crashed. Sareb plans to ramp up sales this year to an average of 30 properties a day.
Sareb, based in Madrid, reported a loss of 261 million euros in 2013 after making 259 million euros of provisions for part of its loan book. The price of urban land in Spain has fallen 48 percent since its peak in the third quarter of 2007, according to the Ministry of Public Works.
Prime Minister Mariano Rajoy’s ruling PP Party, which came to power in December 2011, passed a decree in February 2012 requiring banks to speed up recognition of losses on real estate by boosting provisions for land to 80 percent from 31 percent and for unfinished developments to 65 percent from 27 percent.
A spokesman for Sareb declined to comment. Kathy Altenhoff, a Minneapolis-based spokeswoman for Castlelake didn’t respond to two e-mailed requests for comment.
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