We do not know the exact outcome yet but this report from Simplynetworking dot es suggests that after March 22nd unsold PW properties will fall to the banks.  If this is the case what will happen all the people who have paid deposits (with or without receiving bank guarantees) many of which have purchased on Terrazas, will their properties be built and if so who by.  Or will they be asked to move to an unsold property and will the negotation take place with the banks or PW?  What will the future be for Terrazas, the article says the a private consortium will takeover completed courses but what about Torre Sur? 

Polaris World bankruptcy talks, the unofficial version

Polaris World insolvency, Polaris press statement felt to be a little optimistic

2010-03-09

It would appear that Polaris management were being just ever so slightly optimistic in their assertion that there were one or two "minor points" still to be resolved in the negotiations which will decide whether the company sinks or swims. 

Information which has just arrived is a little more specific about some of the points which may still be under discussion and which would appear to be the following, although as yet nothing has been officially confirmed, and is unlikely to be until the last details have been finalized. 

Banks to take on all unsold Polaris Properties

We have been told that the banks are to take on anything that still remains under the ownership of  the Constructor, which will add an estimated 450 million euros to the value of stock already held by the banks. Properties still remain unsold on the Condado and Mar Menor 2, with smaller pockets dotted around- more than we have been lead to believe in the past.

That's another half a billion onto bank asset sheets. 

Golf Courses split off

A private consortium is apparently poised to take over all the golf courses which are on COMPLETED urbanizations, which have a hotel already in place. This is believed to be the La Torre and Mar Menor Resort complexes. What the fate of the others will be is as yet unclear.

Jack Nicklaus is said to be deeply unhappy with the events which have unfolded over the last 2 months and is said to have requested that his name be removed from any publicity associated with these golf courses as he does not wish his own reputation to be tarnished.

The banks are to retain the name of Polaris World, but this will only be a trading name.

Devastation of the workforce.

The biggest blow to the region is the reduction in the workforce. Apparently staff at head offices are to be reduced from 300 to 60 by the end of the month, and at the moment it is unclear what effect this will have on the remaining business activities.

Polaris World Golf Debentures.

All those who paid for 25 year debentures at a cost of 25,000 euros each, along with those who have paid their annual PW Green fees are likely to become creditors of Polaris World should  an agreement not be reached with the new"bank management company" to honour their payments.

It is rumoured that 125 people have actually purchased their debentures. 

What do the residents of Polaris World feel about all of this?

Talking to residents on the Resorts over the last few days, many have expressed their opinions that the quicker Polaris dissolves, the better.

The feeling expressed is that the management are out of touch with the needs and wishes of the residents, over-priced bars and restaurants failing to deliver what the customers really want, and failing to understand the needs of an overwhelming majority of Ex-pat residents.

Those living on community run resorts expressed the opinion that they were a lot better off without the Polaris management and that the level of service had been considerably better since they ceased to run the resort.

It is always surprising how few ex-pats are ever given the opportunity to assist Spanish businesses who wish to market to the ex-pat community and lead them to a greater understanding of what the people they are trying to market to actually want and actually need.

Economic Crisis is a great leveler. With a little more communication and co-operation a phoenix could so easily arise from the ashes of the Polaris World meltdown.

If indeed, the rumours are true.

Still not much news really.......  its a waiting game

Polaris World, 3 month period of bankruptcy protection expires today......

2010-03-22

Polaris World went to the courts on 22^nd December to seek 3 months protection from their creditors to avoid being pushed into bankruptcy.

Today is the 22^nd March, so technically today is their last chance to salvage the company from the ashes of their former empire.

10 days ago an announcement from Polaris managagement assured the world that things were pretty much agreed and that a few "minor details" had to be confirmed before an official announcement was made about the future of the company.

Since then there has been silence.

Absolute silence.

Not a whisper in the press, not a murmur, or a comment, or an article speculating what the terms of the agreement could be. 

Nothing.

Understandably , these negotiations would have been hard, more than hard, desperate.

 

Polaris bit off more than it could chew with the final Condado development which has sucked cash from Polaris resources and left it drained and bleeding on the ground. Massive investment in land, infrastructure, facilities for the sale of a paltry 3000 apartments.

Many watched open-mouthed as the development began just as the property market started to slide, astonished that so much money was being pumped into the most ambitious development yet. Massive infrastructure grew from the plains,  thousands of trees were planted and a few little rows of white apartments appeared in the far corner of an enormous space.

News soon filtered out that apartment purchasers  were being offered good deals to exchange properties they had bought off-plan for those which were already built, and many started to suspect that once this first phase has been completed that no further development would be started.

As Spain slid into a property slump, the scale of the property boom meltdown became apparent, with more than a million unsold properties littering the coastline.

Polaris renegotiated a billion euros worth of debt, giving away the land purchased for the second phase of Condado de Alhama and surrendering hundreds of unsold properties to the banks, hopeful that it could continue trading. But within just 3 months they owed a further 120 million euros, ongoing expenses, wages, rents and monies owed to suppliers accumulating to push them back into a state of negative liquidity, the stagnant property market failing to yield capital to cover expenses.

 

Since then, they've been renegotiating to try and avoid bankruptcy.

 

The banks are going to play hardball, and so they should. Valuable businesses which earn money are what the banks want, not more unsaleable properties to clog up their asset sheets, they want  management companies, golf courses, resorts with completed infrastructures which function efficiently and profitably, not empty apartments.

 

And as the weeks have gone by without settlement being announced, the likelihood of Polaris obtaining a favourable deal became smaller and smaller.

Sources close to the action have said that a complete carve-up is inevitable, with several parties apparently interested in acquiring parts of the Polaris pie, and we've all been waiting anxiously for confirmation of who is getting what and how the new structure will function.

 

The big spanner in the works of course is the possibility that Paramount may build its new theme park here, in which case the assets held by Polaris, which are unsaleable now will be worth a fortune.

Some have speculated this weekend that the silence could indicate a deal with Paramount and the consortium who will build this theme park IF it happens, the Polaris assets forming part of the consortium team, but others say this is unlikely as the first stage of feasibility studies are still in progress and it is unrealistic to think that a decision of this magnitude could be made BEFORE the correct procedures have been followed.

Unless, of course, it was a done deal before Pedro Cruz, the Minister for Culture came back from Dubai, which, of course is entirely possible. With the banks offering the Condado land to the studios, it could have been in everyones minds, and big bankers move in big circles, so who is to say the banks didn't know about this studio deal before these negotiations even began.

If they suspected this could happen, and it DOES  happen, they've made an amazing, far sighted investment on behalf of their clients.

Or maybe they just got lucky.

 

The other possibility is that Polaris are negotiating hard, knowing full well that what they have now COULD be worth a fortune, IF Paramount goes ahead.

 Or somebody who thinks, or knows, that this Paramount deal is going to go happen,  is sticking a spanner in the works by joining the negotiations, or even purchasing Polaris outright, or maybe giving them the backing to stay liguid.

There are so many "ifs" for Polaris and this Paramount deal. News has just come in that Brussels have still not ruled on the legality of the Corvera airport bail-out plan. IF they rule it illegal it makes the case for Murcia considerably weaker as this airport is part of the big fat carrot being dangled in front of Paramount.But until they make an official ruling it's just another IF on a long list of If's.

But the clock is ticking today and the law waits for no man.

 

One of the Spanish papers reported the date for the official process as being the 29^th, but this is the only place this date has appeared, the dates quoted on the original court papers as three months from the 22^nd December.

 

It's the 22^nd March.

Watch this space.

Polaris negotiates 1 months grace with bankruptcy courts

Polaris World bankruptcy, one further months protection granted by courts

Polaris world has sought one further months grace from the Murcian courts to continue negotiations with its creditors.

The sum under negotiation is now said to be 83 million euros, much lower than the 120 million which was originally quoted in December 2009.

Polaris argues that it has sufficient assets to cover all its debts, and has contracted an independent assessor to value the assets in realistic market terms, the hard nosed attitude of its creditors seeking to undervalue them and acquire at bargain rates.

The company now has until the 22^nd of April to complete its negotiations and sign an agreement with creditors by this date, which it is adamant it will be able to do.

 

It says that there are stirrings of positivity in the housing market, and claims that it has sold 12 properties in the last few days, mainly to overseas investors.

No doubt the speculation that the Paramount giant may be building a theme park in the region will have encouraged one or two moneyed investors to take a gamble and pick up bargain property in the region , activity and speculation  boosting  confidence and a mood of positivity. Inaccurate reporting in the British language press has lead to the impression in many circles that this is a done deal and is definitely going ahead, which of course it may be, but logistical and viability studies are still in the early stages and as they say, "there's many a slip twixt cup and lip, " and until official announcements and financing are agreed nothing is definite at all. At the moment no-one even knows where the park could be located, although several municipalities are staking their claims.

 

One month of grace could make all the difference to Polaris as the preliminary findings will have been made public, and we'll all have a better idea whether Polaris could be in the right place at the right time to make a fortune from Paramount, or whether it has to concede  defeat and hand over its most prized assets to creditors.

 

In the meantime, negotiations continue apace, with Polaris fighting to achieve the full value of its assets, and the banks determined to get the best return on an investment they hadn't anticipated having to make when they lent money to the constructor in the good faith that it would be repaid.

 

22^nd April, let's see what happens

Anybody have any update on what the latest news is with PW??? Paws.

update from PW website:- 23 April 2010 A deal was finally signed with the banks late yesterday and it is very positive news. Polaris has refinanced and sold certain assets on their resorts. The sale includes the courses at Mar Menor, Terrazas and Alhama. It also includes the hotel at Mar Menor and the social centre. Polaris have retained land on Terrazas and Condado de Alhama and new projects are in the pipeline. For anyone living and owning on the resorts they are unlikely to notice much difference although certain services like golf on three resorts will be run by an external company. Polaris World have come out of the negotiations in a very strong position, debt free and we look forward to some exciting developments ahead. With the huge increase in market confidence and in property sales on the resorts this year, a refinanced company and plans for the future this is very positive news for everyone involved with Polaris World. Anyone any ideas what this will really mean for us?????