After being restructured to concentrate on shopping centres, Spanish company Filo is ready for ambitious expansion and may look outside its home market
In 1997 Bankers Trust, now Deutsche Bank, spotted the shopping centre jewel in the Filo crown. Filo had been suffering, along with many developers in Spain, from the recession that followed the Olympic Games boom. Its heady mix of activities including hotels, nursing homes, car parks and residential development projects was also taking its toll on its financial performance. In 1996, the company had consolidated losses of €61.06m (Pts10.16bn).
Deutsche Bank, seeing the warming economic outlook in Spain and the potential for restructuring by focusing on shopping centres and residential, decided to take a 32% stake in the company. It bought in Canadian shopping centre developer Ivanhoe, a subsidiary of Caisse de Depot de Placement du Quebec as co-investor taking 16% each. They each paid around $9.5m for their stakes which was part of a €29.66m (Pts4.935bn) rights issue.
Deutsche Bank advised on the restructuring which included refinancing the company’s short-term debt of €63m (Pts10.5bn). Non-core assets were also sold including its stake in retailer Corre Corre.
Management restructuring included bringing in Pedro Medieta as director general, Ivanhoe’s Claude Dion as general director of shopping centres, Pere Vinolas as financial director and Juan Pazos Rodríguez as acquisitions director.
The healthy company now has 80% invested in shopping centres and the remaining 20% in residential. The restructuring has also produced an impressive turnaround in profits. It converted losses of €13.9m (Pts2.3bn) in 1997 to profits of €114,000 (Pts19m) in 1998.
Its largest asset is the award-winning 40,000m2 Grancasa shopping centre in Zaragoza which it purchased for €105m (Pts17.5bn) with its second capital increase since Deutsche Bank and Ivanhoe’s arrival. It raised €56.5m (Pts9.4bn), the majority of which was used to buy the centre and the remainder for centre improvements and to purchase residential land.
Filo has three other centres which all trade under the Max Center brand. La Farga in Barcelona with a gross leaseable area (GLA) of 18,565m2 and which is 49.9% owned by ING, Valle Real in Santander which is also includes ING as an investor as well as several occupiers. It has a GLA of 47,503m2. Its final centre is in Kareaga in Bilbao which is majority owned by Filo but again include occupiers with stakes. It has a GLA of 46,400m2.
It also owns the development project Ria 21 located between the Guggenheim Museum and the Palacio de Musica in Bilbao. Construction is to begin on the 20,000m2 centre in October 1999.
Filo says it will continue to expand ambitiously looking for standing acquisitions with the calibre of Grancasa or forward purchasing schemes under development. These will be financed thought additional capital increases and bank finance with a typical leverage of 40% equity and 60% mortgage.
The company is also looking outside its traditional markets. It is considering opportunities in Portugal and may look at France in the future.
|
Financial highlights |
1998 |
1997 |
||
|
€m |
Pts bn |
€m |
Pts bn |
|
|
fixed assets |
153 |
27.51 |
168 |
27.97 |
|
shareholder equity |
46.3 |
7.71 |
46.1 |
7.66 |
|
net turnover |
40.4 |
6.73 |
33.1 |
5.51 |
|
net profit (loss) |
0.01 |
0.019 |
(13.9) |
(0.023) |
Filo
Avenida Diagonal 523
08 029 Barcelona
tel 34 93 419 5660
fax 34 93 419 0699
www.filo.es
