Sacyr property unit cancels 400 million euros of bank debt
MADRID (Reuters) - Spanish builder Sacyr (SCYR.MC) said on Wednesday it had agreed with banks to swap 400 million euros ($551 million) of debt at its Vallehermoso property unit for real estate assets, a step further in the clean-up of the parent company.
Sacyr put debt-laden Vallehermoso, whose assets mostly consist of hard-to-sell undeveloped land for residential use, up for sale in October. Sacyr said on Wednesday the unit was still for sale.
Spain's indebted builders have put assets on the block and focused their business on services and construction abroad as they try to counter a severe economic downturn triggered by a 2008 housing crash.
The cancellation brings Vallehermoso's debt down to 800 million euros, 580 million of which is parked with Spain's so-called 'bad bank' Sareb after being transferred last year by the country's nationalized banks, such as Bankia (BKIA.MC).
Spanish banks which did not participate in the European bail-out last year, such as Santander (SAN.MC) and BBVA (BBVA.MC), are selling off portfolios of discounted real estate assets to hedge funds as they clean up their balance sheets.
Sacyr merged with Spanish housing firm Vallehermoso in 2003, when Spain's debt-fuelled construction boom was at its height, to become Sacyr Vallehermoso. The unit is highly exposed to the housing market, with around three-quarters of assets in undeveloped land and the rest in residential developments.
On October 1, it put the unit up for sale which allowed Sacyr to remove Vallehermoso's debt from its balance sheet.
Sacyr had total net debt of 6.9 billion euros at the end of September, more than three times its market capitalization.
($1 = 0.7261 euros)
(Reporting By Sonya Dowsett, Editing by Louise Heavens)
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