Angelo Gordon, real estate bargain hunter and candidate to take over Room Mate after bankruptcy

Angelo Gordon, real estate bargain hunter and candidate to take over Room Mate after bankruptcy

An investment firm that, until now, has taken steps slowly in Spain is emerging as the main candidate to take control of the hotel chain Room Mate. The company managed by Kike Sarasola requested its voluntary bankruptcy last Fridaybefore the financial problems you are facing and with the justification that it has agreed to the rescue by an investment firm, which would guarantee the continuity of the business.

At the moment the company has not given names. Nor to the representatives of the staff, who do not know who would be behind taking over the baton of the company with the approval of Sarasola, the businessman who acted as Albert Rivera's landlord and Isabel Diaz Ayuso, and which owns 60% of the shareholding. However, there is an investment company, a candidate to take control, which different sources repeat: Angelo Gordon.

It is an investment firm specializing in corporate debt operations –often involving companies with financial problems– and in the sale and purchase of real estate assets. A firm that, in recent weeks, has also monopolized information in the United States for being one of the creditors of the Revlon cosmetic group that – apart from the distance – is experiencing a situation similar to that of Room Mate.

On paper, the hotel business and cosmetics have little to do with each other. The similarity is in the problems faced by both companies: the shareholding structure and the demands to repay the debt to its creditors. "Our complex capital structure has limited our options for navigating macroeconomic issues," said Debra Perelman, CEO of Revlon, owner of brands such as Elizabeth Arden or perfumes marketed under the names of Britney Spears or Christina, a few days ago. Aguilera, among others.

Revlon has had to face global problems in the supply chain in recent months as a result of the pandemic. Meanwhile, Room Mate has been months of shareholding tensions with Sandra Ortega, who until now has had 30% of the capital; and weathering the effect of the pandemic on tourism. Also, with debt tensions – more than 100 million euros – and a failed request for rescue from the State Industrial Participation Company (SEPI), which has not supported the hotel company. Room Mate assures that it has been “strongly hit by the serious pandemic and by the court litigation that the shareholder Sandra Ortega maintains with the financing banks of Room Mate”.

On those very parallel paths, Revlon now has to negotiate with its creditors, including Angelo Gordon. He will do so under the supervision of a judicial authority, because he has declared voluntary bankruptcy. Meanwhile, in Spain, a Mercantile Court in Madrid will also have to review the finances of Room Mate and, if a takeover of Angelo Gordon or another firm finally materializes, give the go-ahead to the proposal for the future that it designs for the Spanish hotel company, which does not own any hotels, which reduces the options for selling assets and slimming down the business.

The American firm, named after its two founders, John Angelo and Michael Gordon, was created in 1988. In Europe, the firm's history is relatively short. He landed in the real estate business of this continent in 2009, in a flat financial crisis. Since then, he says, it has invested nearly 5,000 million dollars in the region, with offices in London, Amsterdam, Frankfurt and Milan.

The company has ruled out assessing whether or not it is interested in taking control of Room Mate or breaking down what its priorities are with respect to Spain. What he does explain are his axes as an investor.

The New York-based firm says its investments are often focused on assets where its shareholders lack the capital, patience and experience to improve their liquidity and enhance their value. "We identify inefficiencies in the real estate market," he says when talking about this business. That is to say, it looks at assets with problems where it sees revaluation and repositioning capacity, whether debt or real estate.

Until now, its operations in Spain have been limited and the firm does not comment on them either. That they have transpired, he has owned a property in Madrid's Gran Vía, at number 30, which he sold in 2018 for 75 million euros to another investment firm, Thor Equities, which has converted it into luxury homes.

Also in Madrid, this year, it has acquired an office building near the Adolfo Suárez de Madrid-Barajas airport. However, his most relevant operation to date is not in the capital, but in Bilbao. In 2018 he bought Torre Bizkaia, the former headquarters of BBVA, for 85 million euros. A 21-storey building, where he has the Bizkaia Provincial Council and the low-cost fashion giant Primark as tenants. The sale of this building was activated earlier this year for 150 million eurosalthough the American firm does not confirm this movement either.

Apart from his real estate operations, in the Spanish market, Angelo Gordon has been among the debt holders of companies such as the media group Prisa or the oil company Deoleo. When talking about corporate debt, the investment firm usually keeps an eye, as can also be seen in the aforementioned Revlon case, on companies that are going through financial problems. For example, it is the main shareholder of the technology company Sungard, which in April of this year again requested the protection of Chapter 11 of the United States Bankruptcy Law – which allows it to continue operating but under judicial supervision – due to the impossibility of deal with your debt.

As for who pulls the strings of the firm, it has two CEOs: Josh Baumgarten, from the real estate investment giant Blackstone; and Adam Schwartz, who has been with the firm since 2000. He also remains with the firm, as chairman of the advisory board, one of its two founders, Michael Gordon. His partner, John Angelo, passed away in 2016. Then, the American press highlighted him as one of the representatives of the New York elite, who lived in the Dakota building, next to Central Park; and that, among his best friends, was the former director of Disney, Michael Eisner. It was this, according to the British newspaper 'Financial Times', who introduced Angelo to his wife Judy Hart, who composed the theme song for the series 'Cheers'.

Source link