Restaura applies for voluntary insolvency proceedings

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Restaura applies for voluntary insolvency proceedings following months of negotiations with its creditors and the search for new financial partners.

The limit to arrive at an agreement on the refinancing of its debt of close to €500m passed on Friday and Chairman and Founder of Restaura, Xavier Solano, who had found it impossible to secure the necessary support, had no option but to apply for voluntary insolvency proceedings.

Over the last year Restaura has managed to reduce its liabilities to €300m through the sale of buildings and it appeared that it might be able to overcome its debt problems. In November 2010 it sold three properties in Paris to the RLM fund of Luxembourg for €55m. This allowed it to cancel debt of €38.4m with BBVA, Banco Sabadell and the French entity BCME. The main debtor of Restaura is Banco Pastor, a Spanish bank.

Towards the end of 2010 the French firm Foncière Colbert Finance took 70 percent of the company. Although the transaction volume was not disclosed, it is understood that Colbert bought into the company for a symbolic amount, with a commitment to provide equity up to €25m to enable the company to resume development on a number of projects.

Colbert’s commitment was subject to the renegotiation of the bank debt. It was also subject to other conditions including achievement of a moratorium on interest payments for five years on those loans subject to guarantees. However, none of this was forthcoming and as a result Xavier Solano forced Colbert out of Restaura. No replacement was found and hence the company’s application for voluntary insolvency through the Barcelona courts.

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13 Responses to “Restaura applies for voluntary insolvency proceedings”

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