Promise of paying back 5.2 billion € loan
Posted by Administrator (admin) on Jul 15 2008
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One of Spain's largest constructors, Martina Fadesa, has filed for bankruptcy protection. After a meeting of several hours Monday night the board made this decision in an attempt to guarantee the survival of the Company.

This week Martinsa failed to fulfil its promise of paying back 5.2 billion € loan from 45 banks worldwide.

At the same time the Spanish Ministry of Housing has today released data stating that the price of freehold housing has fallen in the last quarter.

This is the first time that prices is going the "wrong" way since the Ministry of Housing has begun issuing statistics on the property market.

So in real numbers the house prices in Spain has increased by 2% but still this is three points below the general IPC inflation rate at 5%.

Meaning; prices are - from one quarter to the next - declining, although only by 0.3%

So today the Spanish stock Market took a hit in the aftermath of the Martinsa decision of filing for bankruptcy protection. One of the hardest hit is the Spanish bank; Banco Popular, who dropped 5% in the value of its share price. It has lent 400 million € to Fadesa.
Other main creditors to Martinsa are Caja Madrid and La Caixa, each of whom has lent 1 billion €.

Pedro Solbes who is the Spanish Minister for Tax and the Economy, will be giving a statement to Congress on the economic crisis. Later this month he will give his appearance and most likely be faced with demands of delivering more detail than those given by the Prime Minister. José Luis Rodríguez Zapatero Ruled out a possible recession but did admit that Spain is facing ‘serious difficulties’.

Last changed: Jul 15 2008 at 3:39 PM