Tremón Group declares itself insolvent after being unable to pay off 900 million euro debt
The property developer Tremón, has gone into administration after being unable to pay off debts totalling 900 million euros. This action makes it the second largest real estate promoter to declare itself insolvent after Matinsa-Fadesa was declared insolvent earlier this year.
Judicial sources have confirmed that around a dozen subsidiary groups belonging to Tremón will also go into administration this week among which include the well known Hotel chain group TRH. Debts owed by Tremón could be as much as 1,200 million euros.
Tremón could not be contacted to give any further explanations on the causes for going into administration. The building promoter got into serious difficulties in 2007 when it tried to get 35% of its capital by floating shares on the market. However, due to instability in stockmarkets around the world and the global financial crisis this attempt had to be abandoned.
In January 2008 Tremón had to get rid of 50 members of its board of directors due to the delicate situation in the property market. The drop in sales and difficulties getting finance meant that it had to stop a number of its building projects.
According to information from the Comisión Nacional del Mercado de Valores (CNMV) Tremón had accumulated debts of 712.3 million euros by July 2007. Out of these debts it owed 38 million to Cajasur, 76.9 million to Banco Pastor, and 65.9 million to Bancaja.
The business plan followed by Tremon would have meant that it had to pay back in the region of 1,842 million euros between 2008 and 2013.
Tremón was created in 1993 and had business interests in Poland, Hungary, the Chech Republic and Morrocco. It made a net profit of 36.5 million in 2006. The group also had plans to expand into Rumania, Bulgaria and Mexico.
Tremon has now joined the list of building promoters that now find themselves in the same situation: Martinsa-Fadesa, Llanera, SEOP, Grupo Lábaro, Cosmani, Promodico, Urazca, Grupo Drac and Restaura.