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UPDATE 1-Renta joins casualties of Spain's property crash
March 19, 2013 / 12:55 PM / 5 years ago

UPDATE 1-Renta joins casualties of Spain's property crash

(Recasts with insolvency filing, creditors and background)

MADRID, March 19 (Reuters) - Spain’s Renta Corporacion filed for insolvency on Tuesday, the latest real estate company to struggle to make debt payments as a prolonged downturn hits business and prices.

Dozens of property companies have collapsed in Spain, where house prices have slumped around 40 percent from their peak, but until recently banks were willing to refinance corporate debt in hope of an economic upturn.

Liquidations are now more likely as lenders, forced by the government to write down losses on real estate debt, refuse to turn over loans in a severe economic downturn after a banking overhaul that slashed the number of players in half.

Reyal Urbis became the second largest casualty of the property crisis after filing for insolvency last month with debt of about 4.4 billion euros in 2012.

Barcelona-based Renta Corporacion, which focuses on renovating buildings and reselling them, has total debt of about 185 million euros ($240 million).

It debuted on Madrid’s stock exchange seven years ago at the height of a property and construction boom. The stock, which had traded as high as 38.5 euros in February 2007, was suspended from trading on Tuesday at 0.57 euros.

Creditor banks include Banco Popular, ING Real Estate Finance, Deutsche Bank, Caixabank, SAE and Banco Caixa Geral, as well as Sareb, the holding set up by the Spanish government to handle soured property assets.

Court proceedings, which could take years, will either end in the liquidation of Renta’s assets or a plan to re-float the business.

$1 = 0.7717 euros Reporting by Tracy Rucinski and Sonya Dowsett; Editing by Fiona Ortiz and Mark Potter

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