Polaris World Close to Insolvency
January 7th, 2010
Spanish resort group Polaris World is in talks with lenders to avoid filing for bankruptcy protection. Fifteen of Polaris World’s subsidiaries – around half the group – are thought to be insolvent, including four resorts, two hotels and a number of construction, sales and service companies.
Details of the company’s situation were made public by the Commercial Court number two in Murcia, which earlier this week recognised that Polaris World has a three-month negotiation period under Spain’s bankruptcy law before filing for protection from its creditors.
Earlier this year, Polaris World’s lenders agreed to cancel most of the company’s debt in return for real estate assets. The remaining debt is thought to be around €100 million, although some have suggested it is much higher.
No spokesperson for Polaris World was available for comment.
The Murcia regional government has expressed confidence in the company. “It is and has been very important for the region”, executive spokeswoman, Maria Pedro Reverte, said at a press conference.
“It’s bad news, but we all must rely on the ability of management and the value of their assets.” She added: “The goal of the bankruptcy law is to save companies.”
What concerns the government “is the future of the more than 700 employees of the group that could be affected,” she added.
Story from OPP (subscription required)
