At times, companies require liquidity to tackle new investments or to restructure a liability with an excess of short-term debt. These companies often fail to secure this additional financing from their usual financial institutions, which would help them resolve these complex but non-critical financial situations.

When a company in this situation owns a property where it conducts its business, one possible solution is sale and lease back. This type of transaction, also known as lease-back or retroleasing, involves selling a property to an investor followed by a long-term lease of the same property, usually through a rental contract of between 10 and 20 years.

At Altria Corpo, we have helped some clients obtain liquidity through this method. In recent months, we have various examples of clients for whom we have secured several sale and lease back transactions. Let’s look at some recent successful cases to understand how it works and how it has helped the company overcome this difficult time.

 

A company from the Community of Madrid in the industrial sector, with 30 years of history, faced bank loans that represented an excessively high debt service. Despite increased sales and the quality of its clients, the banks did not offer additional financing or allow for extended terms. Altria advised them by structuring a sale and lease back operation using one of their industrial warehouses, which was owned and had a small outstanding mortgage. Altria found a buyer, an alternative financing company that acted as an investor, purchasing the industrial warehouse for 1.75 million euros and leasing it back to the same company for a renewable term of 10 years, with a purchase option after 10 years. Thus, the company did not have to vacate the sold property and retained the right to continue using the space through this rental contract. This provided them with immediate liquidity resulting from the sale.

On other occasions, sale and lease back provides liquidity for the expansion of the business itself. This was the case for a Catalan company, also in the industrial sector like the previous one, which wanted to serve new clients demanding higher production. The working capital and some fixed asset investment needed to undertake this project could not be financed by their institutions, as their level of indebtedness was already too high for them. In this case, the best option was also a sale and lease back on their main industrial warehouse, and the operation generated liquidity of 3 million euros for the procurement of raw materials, increased working capital, and enhanced production capacity, with which they can grow in sales and profits in the coming years.

Therefore, sale and lease back should be seen as a financing operation that, in certain circumstances, is the best option for the company.

In the following post, we will delve more into how sale and lease back transactions are structured.

Antonio Llera, who comes from Deloitte, joins the Barcelona team to deal with higher value-added operations, and Javier Galindo and Ignacio Martín expand the Madrid team, doubling its current capacity.

2024 marks the tenth anniversary of Altria Corpo and the year begins with important additions in the Corporate Finance Area that will further boost the business, level of service and advice for medium and large companies.

In Barcelona we are very proud to have Antonio Llera, a professional with extensive experience in corporate debt advisory and restructuring. In recent years he has held the position of senior manager in the Debt Advisory and Restructuring division of two of the most renowned financial consultancies for large companies, KPMG and Deloitte. Previously, he was at Banco Santander, where he held various positions in its Corporate and Investment Banking division, as well as in Structured Finance Risk. Antonio holds a degree in Business Administration and Management from the Universidad Pontificia de Comillas (ICADE) and several postgraduate degrees in finance from the IEB and Eada Business School.

Meanwhile, in Madrid, an office we opened in the summer of 2022 with two consultants, we have decided to increase our service capacity with two new professionals, taking into account the enormous potential of the business market in the Madrid region and the greater reach it gives us for the business fabric of the rest of Spain. Javier Galindo and Ignacio Martín have joined us to add value to their experience in business financing.

Javier Galindo is a professional expert in corporate finance with special emphasis on financing solutions for capital goods and other productive assets. He has spent most of his career in the Spanish branch of the renowned German financial group AKF Bank. Previously, he worked at CESCE, Agco Finance and ALD Automotive (Société Générale Group). Javier holds a degree in Economics from the Complutense University of Madrid and a Master in Financial Management from ESIC, complemented with training in auditing, insurance and foreign trade.

 

Ignacio (Nacho) Martín has more than 30 years of professional experience in different sectors, always related to the financial and business world. For 14 years he worked in the banking sector as a Business Manager and Director of Business Offices in leading financial institutions. He has managed different companies, and in recent years he has broadened his experience with the management of commercial teams in the insurance sector for companies. Nacho has a law degree from the Complutense University of Madrid, complemented by courses in finance and business management at the Polytechnic University of Valencia and the Carlos III University of Madrid.

We welcome these new additions and wish them every success at Altria Corpo.

Altria Corpo is a financial consultancy for medium and large companies, founded in 2014 by Albert Gumà and based in Barcelona. Its main services are advice on debt and equity financing, and access to more than 200 financial providers including banks, alternative financing, debt funds and other instruments. In its 10 years of existence, Altria Corpo has positioned itself as a benchmark in the search for financing for medium and large companies, with an accumulated amount advised of more than 450 million and more than 800 operations. The scope of the companies advised covers the whole of Spain, with a concentration in Madrid and Catalonia, which account for 80% of the total amount advised.