POLARIS WORLD - BANKRUPTCY PROCEEDINGS DISSOLVED

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Polaris World. Judge officially ends bankruptcy proceedings

Polaris World news, Olagolf issue formal statement

Posted 7.37pm, Weds 28th
The Judge in commercial  court number 2 in Murcia, has today declared that the process of insolvency against 15 companies owned by the Polaris World developer has now been dissolved.
The Tribunal Superior de Justicia de Murcia made the announcement this afternoon, now that the legal processes have been completed to end the insolvency process.
The Judge confirmed that the company had presented a written request within the specified time limit stating that it had reached agreement with its ‘ creditors and arranged re-financing which would enable it to move forward with its' business activities.
The Polaris World website statement indicated that an agreement has been reached with the four main banks, Banco Popular, Banco de Valencia, Bancaja, CAMbank and a press release came out from Polaris as follows last week after the announcement of the  agreement:
Polaris World website

23 April 2010: After several months of negotiation Polaris World has today finalised a deal with its creditors (a consortium of four banks) for the clearance of its outstanding debt. The refinancing allows the company to move forward with prospective plans for further development at Terrazas de la Torre resort and Condado de Alhama. Polaris is one of the few major Spanish developers to have survived the credit crisis which started in 2007. With the increase in buyer confidence and property sales seen on the resorts in 2010, largely driven by a return of UK buyers, the news is a further positive sign for owners on the resorts.

These 2 statements would appear to indicate that the re-financing has been arranged with only these four parties, and no further releases have been issued which give details of any assets which have been sold  to clear off debts with other creditors.

Rumours have been abounding all week that the Hotel and Golf Properties had been sold to Olagolf, but a statement issued from the company today confirmed that they have taken over the management and maintenance of the three Golf Courses on behalf of the IRM Group.

IRM group , Iniciativa Resort Mediterraneo, ( Sociedad Inversiones en resorts Mediterraneos, S.L) comprises CAMbank, Cajamurcia, Cajamadrid, Banco popular and Banco de Valencia and already owns much of the land destined for the construction of Condado de Alhama 2, plus a healthy portfolio of other Polaris properties which were "purchased" by them in the re-financing deal which kept the company solvent last year and resulted in the transfer of nearly a billion euros worth of assets to IRM then.

It would now appear that the same group have "purchased" another 83 million euros worth of assets and that these courses have not in fact been sold to an outside buyer, but taken over by the IRM Group. It appears that the hotels and courses have been sold to the IRM group, but that the golf copurses are being managed by Olagolf on their behalf.

No official statement has been forthcoming from Polaris, but Olagolfs' release reads as follows

Olagolf statement

Olagolf assume the maintenance and management of golf in Murcia with an agreement made last week with the Investment Company Mediterranean Resorts, Inc. (IMR).

The golf courses to be managed by Olagolf, are the combination of Condado de Alhama, Mar Menor and Terrazas de la Torre, all located in the towns of Torre Pacheco and Alhama de Murcia. With this new agreement Olagolf is committed to providing services to develop, look after and maintain the courses  to the highest standard to create a considerable challenge and the best possible experience for players. The condition of the courses is the most important factor to ensure a good game, plus  respect for the philosophy of the  designer when creating the course. A design endorsed by the most successful golfer of all time, Nicklaus Golf Trail offers a variety of unique gameplay and the quality seal of Nicklaus Design in each of the holes.

This would appear to confirm that the management is on behalf of the IRM group, and not on behalf of any other party.

My conclusion is that no "outside" parties have come forward to buy out Polaris World assets as many people had hoped might happen as it might provide a level of competition to remaining PW facilities which might drive down the cost of PW services which in many cases are unrealistically high.

The fact that Olagolf are merely managing things on behalf of the Banks will undoubtedly mean those courses will be well maintained. I hope that they may still create a competitive environment in respect of green fees. Time will tell.

The best result from this prolonged negotiation is that the future of Terrazas looks a lot more secure as PW have survived in a form that allows Terrazas to develop. Hopefully it will quickly become a hive of activity and complete within a reasonable timeframe.