The assignment in payment (dación en pago) was agreed for certain properties not required for the continuity of the company’s viability in favour of the financial institutions participating in the group’s syndicated financing, and one financial institution’s observations regarding the transaction were rejected.
Under order of Barcelona Commercial Court No. 9 of June 11, 2014, it was agreed to adjudicate 14 properties (not necessary for the company’s activity) to the financial institutions that granted a syndicated loan agreement secured with a mortgage over these properties for a final price equivalent to 66% of the special privileged credit under the syndicated agreement, cancelling the outstanding debt. The price the lenders offered exceeds the appraised value, and no other bidder has made a better offer.
In the procedure, one financial institution opposed the award, its main arguments focusing on the (i) lack of capacity of the agent bank of the syndicated facility agreement to request the adjudication of the assets, and (ii) the non-fulfilment of the decisionmaking system established in the financing agreement. The court refuted these arguments, considering that the (i) agent bank did not exceed its powers by requesting the adjudication, because the assignment in payment (dación en pago) is comparable to an act of enforcement of the guarantee; and (ii) majority voting system agreed establishes unanimity as an exceptional criterion, which must be interpreted restrictively and cannot be applied for the adoption of this agreement as it not established in it.
The adjudication approved will reduce liabilities, improving the chances of success of the composition agreement, and guaranteeing the preservation of jobs and maintenance of the business sector.