Polaris World bankruptcy, just eight days until April 22nd deadline

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Polaris World bankruptcy, just eight days until April 22nd deadline 

2010-04-14
There are now just 8 days to go before Polaris World is forced to make an announcement about its' future, as this is all the time it has left to negotiate a solution to it's financial problems or be forced to enter into a state of voluntary bankruptcy.
It originally went to the courts on the 22^nd December to seek 3 months protection from it's creditors to enable it to renegotiate its' debt, then was granted one further month on 22^nd March, but the law provides no further shelter and by the 22^nd April it must have the situation resolved one way or another.

There's very little firm information to be found about exactly what is going on at the moment, and surprisingly little speculative musings in the press, all that is known for definite is that Polaris is frantically letting staff go, closing offices, and trying to close deals which will sell off various parts of its empire to different parties, effectively carving up the empire into lots of little pieces.

The level of debt is still not clear. Figures were quoted in December of 110-120 million euros, owed mainly to the big four, Bancaja, CAMbank, Banco de Valencia and Banco popular, who are owed approximately three quarters of the outstanding figure, the rest to smaller creditors, Cajamurcia and Cajamadrid, although the figures being quoted at the moment are 90 million , 83 million and 88 million.
More than a billion euros worth of re-financing was arranged last autumn when property was exchanged for debts, which left the big banks holding 6 million square metres of land which had been zoned for building ready to expand into Condado de Alhama 2 and a plethora of other properties, under the name of the IRM, Iniciativa Resort Mediterranea. ( Banco de Valencia, Banco Popular, Cajamadrid, Cajamurcia, Caja Mediterraneo.)

Since this renegotiation, Polaris ran up these further debts due to the operating costs of maintaining offices, sales staff, and basic operating costs, costs which it is now desperately trying to reduce and shed.

We have been told by various sources that many of the assets and companies have been sold or that deals are on the verge of completion.
Although nothing can be officially confirmed, rumours abound that deals on the petrol station and  supermarkets have been  concluded, with others agreed on the golf courses which are completed and have a hotel already in place as well as several smaller associated businesses.

Unsold property stock, estimated at around 450 million is to be taken on by the banks, although the big sticking point on this is valuations.
Polaris optimistically announced on 23rd March that it had sold 12 properties in the few days preceding the March 22^nd deadline and that stirrings in the property market were creating a new mood of optimism in construction circles.

This optimism , however, was all based on the excitement that Paramount studios were considering Murcia as the site for a new leisure complex and theme park, a possibility which lead those with a few euros to spare into a spot of speculative purchasing, but the bubble seems to have burst as Paramount have since announced that they have no interest in building a theme park in the region, although government sources say that viability studies are still in progress for the construction of a leisure facility.

The big problem Polaris have faced this month is the valuation of their property assets. Property prices have fallen since last year, although banks and agents have wildly differing statistics for the percentage by which properties have devalued.
Some agents openly say they are selling the bargains, with canny purchasers renting until someone is desperate and snapping up properties at 35% reduction on peak values, and banks are openly offering properties at this level of discount in public auctions and in special property exhibitions throughout Spain, particularly properties at the lower end of the quality and desirability scale.
The government are still trying to maintain that pieces have  fallen by less than 10% since their peak, although say that to an estate agent and they'll raise their eyebrows and mutter something along the lines of they'd be happy to be able to sell anything at that sort of discounted price.
Polaris don't want to give it all away for nothing, although as the days count down and the deadline of the 22^nd April approaches, it's increasingly a question of how much they can sell off before being forced to settle on a figure way below their expectations for the remaining balance.

8 days and counting.

 Track the story back
23rd March. Polaris negotiate 1 months grace, 23rd March
22nd March , 3 month protecion expires today, expires
Could the cross of culture raise a phoenix from the ashes of polaris
Track the story back, Polaris world talks, the unofficial version
Polaris claim settlement is imminent
And back
Rumours that Polaris World is re-negotiating debts, 10th June2009
Mayor of Alhama meets Polaris representatives,  Polaris pay Alhama 31st Dec
Company traded off 1000 million euros worth of debt, Polaris World problems 30th Dec
Polaris world crisis, what the papers are saying, Polaris World debts 30th Dec
Polaris World seeks court protection from creditors, Polaris world crisis 29th Dec