Developer Habitat in trouble
Thursday, August 7, 2008 @ 3:19 PM
Spanish property developer Habitat, in dire financial straits as the bubble bursts on the country's real estate market, is looking for possible buyers, a newspaper said on Wednesday.
The company, burdened by 1.60 billion euros in debts, has recruited the British bank Rothschild to help it find investors able to buy a majority stake, El Pais said.
Habitat recorded a net loss of 444 million euros en 2007, and came close to a suspension of payments early this year, the paper said, quoting sources close to
the company.
It is just latest victim of an abrupt decline in the country's once-booming real estate market.
The Martinsa-Fadesa group filed for bankruptcy protection last month, while another property group, Colonial, was also in trouble earlier this year after declaring more than 8.9 billion euros (14.2 billion dollars) in debt at the end of 2007.
The low interest rates that followed Spain's accession to the eurozone in 1999 fuelled the boom as Spaniards took out mortgages to buy homes for the first time
or to trade up to a larger house.
But the market began to suffer early last year as rising interest rates and the international lending crunch hit Spain's credit-fuelled expansion, making it hard to sell property.
The impact of rising eurozone rates has been especially strong in Spain because the vast majority of mortgages have a variable interest rate.
Source:
Hemscott