The biggest Spanish construction company Martinsa-Fedesa has filed for voluntary administration with a €5.4 Billion debt lodged with 47 creditor banks, making it one of the biggest corporate failures in Spain's business history.

The company says that this is effectively a cash flow crisis, since its assets were valued in June of this year at double its debt, and that this action is designed to protect both creditors and shareholders, and to avoid further losses.

Shares were suspended yesterday, having fallen 34% on Friday: the suspended share value suggests the entire company is worth €680 Million, despite the valuation earlier this year.

A mainland developer hitting the rocks primarily because of mainland problems, but not good news at all.

Canarias24Horas
Reuters

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The Tenerife Experts
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Its terrible, I don't think I imagined it going so bad.

I feel for these companies, and people who are struggling at the moment. If I was still there I know I wouldn't be able to pay the mortgage, and that is frightening.

Reprocussions for the Canaries

News In the Sun Tenerife News in English Martinsa Fadesa collapse rebounds in the Canaries

http://www.newscanarias.net/1000003/...rticle_ic.html

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The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert (1754-1824)

Typical! in one article they say the government will not bail the company out and in the other the government promise the houses will be finished come what may?
He was on TVE last night and it was only reported that a complex of nearly 200 houses in the peninsular wound be finished?

We were informed that our deposit (paid directly to the developers account by TT) on an off-plan development was protected by a bank guarantee registered in Madrid.

This was confirmed in writing (via email) by our agent and the developers at the time.

Thankfully we never had cause to test this statement.

__________________
The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert (1754-1824)

The Spanish press is indicating that the company will finish all incomplete projects, presumably by bank guarantee, and that it will need to refund deposits for offplans, presumably those not yet started, which will bite into such funds are still there for the creditors.

Looks like the Canaries are safe from the fallout. This was a huge company, and a reputable one.

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Janet Anscombe Associates
The Tenerife Experts
for anyone living in or moving to Tenerife
Visit our website www.janetanscombe.com

I believe this is just the start the banks will close down lending to any company that is in the slightest suspect it then becomes self fulfilling as bank withdraw lending to most companies in the construction business

BUT.......how are banks going to survive if they dont lend money...it is after all there raison d`etra............

__________________
The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert (1754-1824)

Already happening for many months now ....

Check their share prices..... they wont..

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