Polaris World financial problems, 22nd february deadline passes

2010-02-24

The date of 22^nd February passed without incident and without an announcement.

Which is a little surprising given that only one month now remains for Polaris World to renegotiate its debts and reach a financial settlement with  creditors, the deadline of March 22^nd looming ever larger.

When the story first broke of the December 22^nd visit to the courts, representatives hurried to re-assure the world that within a few days all would be settled and an announcement could be expected within a very short time.

Since then, nothing, silence.

The rumour mills started  rolling about 2 weeks ago that a  settlement had been reached, but nearly 2 weeks later the silence is deafening.

As 22^nd January approached, many expected that an announcement would be forthcoming, and by 22^nd February that the company could not possibly allow this second important date to pass without even a few re-assuring words, but the failure to even announce a trickle of progress is a little worrying.

 Polaris World insolvency, existing residents unlikely to notice a change

Whilst for many who actually live on the resorts, a change of ownership will have little effect, as the management operations are the one part of the total business which Polaris management are desperate to keep hold of, being efficient and profitable, only the few who have bought off-plan should really be concerned for the investment made and property not yet delivered.

It's those on the Condado de Alhama who have the most to be disappointed about, as without massive injections of new cash, the promised services and infrastructure, and the remaining tens of thousands of homes still to be built on the resort won't materialise until the housing market picks up considerably and properties start to sell again in sufficient volumes to warrant more investment. For the moment they have some facilities, the promised restaurants, bars and golf facilities delivered as promised, but although a good community spirit pervades, they are still very few people in a very large space.

Lawyers are urging that those who have not yet negotiated an exchange contract to accept a different apartment to the one booked, or who still have a claim against Polaris must take action before the 22^nd March, as if the company fails to reach agreement by that date, the company will automatically enter into a state of bankruptcy ,and any individual claims made after that date will be swallowed up into the vast debts, which currently exceed 100 million euros.

The assets of the company are such that a settlement with smaller owners would eventually be obtained, but the normal process is for the assets of a company to be sold, monies realized going first to the government, then the major financiers, suppliers and constructors with the largest bills, before finally filtering the dregs down to individual homeowners, actions which will take a number of years.

 

The numbers of those with deposits paid to Polaris are  fairly limited, as the majority of properties on the established resorts are all re-sales, whilst many of those still under construction are owned by the banks as part of a financial re-structuring package agreed last year.

 

Many who had already paid deposits on off-plan properties have accepted, albeit grudgingly in some cases, alternative properties, and the advice being given to those who have still not reached an agreement or commenced a claims process is that the 22^nd March is drawing nearer, and, given the lack of optimistic announcements, speed is of the essence.

 

To read back through previous reports relating to Polaris World

Mayor of Alhama meets with Polaris team, Click here

Company traded off 100 million euros worth of debt, Polaris World problems 30th Dec

Polaris world crisis, what the papers are saying, Polaris World debts 30th Dec

Polaris World seeks court protection from creditors, Polaris world crisis 29th Dec

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