Since the beginning of 2022, Spanish companies are suffering various shocks that compromise their economic viability and financial survival.
On the one hand, there is the sharp rise in energy prices caused by the war in Ukraine and Russia’s reprisals. This increase in energy prices causes an increase in production costs that can rarely be passed on to the price, so that the reduction in margins is a reality.
Another variable of great concern is the high inflation experienced over the past year, which does not seem to be abating. The generalised rise in prices, attributed both to the monetary expansion of recent years and to restrictions in the supply of goods resulting from the pandemic and the war, is particularly affecting small and medium-sized enterprises, which are generally unable to pass on this rise in the prices of their raw materials and supplies.
High inflation has motivated the latest interest rate hikes by the European Central Bank. Everything seems to indicate that, after the last increase of 0.75%, there will be further increases in the coming months. This will have a direct impact on all variable rate loans that companies have, as well as tightening the risk concession criteria of financial institutions.
Therefore, three risks (rising energy and raw material costs, high inflation and rising interest rates) that companies must manage and whose recipe in the financial sphere is far from simple, but which must necessarily involve diversification of sources of financing, both bank and alternative. Altria Corpo is, as always, there to help in this financial diversification.
The wide variety of financial solutions obtained is the main feature in a year marked by the exit of the pandemic and the restriction of bank credit in a context of inflation and probable recession.
The financial consultancy Altria Corpo, which specialises in advising medium and large companies on financing, raised 50 million euros in financing for its clients in the first half of the year, with more than 30 transactions successfully advised.
In a context of great difficulty in accessing bank credit, the firm has obtained very varied and innovative financial solutions, both from the banks themselves and from alternative financing.
Some of the most significant operations have been the Sale&Lease-back of an industrial building for a company in the metal sector, for which the company obtained a liquidity of 2.8 million euros to undertake its business plan; a mortgage loan of 1. 2 million second-ranking mortgage loan on its facilities granted to an industrial company by a public financing institution; a loan of 5 million euros to a plastic packaging company granted by a debt or direct lending fund; the financing of the acquisition of an industrial company in a 50% leveraged operation thanks to the ICF; and the advisory and execution of a 7.2 million euros syndicated loan for an industrial company, with the participation of seven financial institutions.
Likewise, in a difficult context for many companies, after two years of reduced income due to the pandemic, Altria Corpo has advised some clients in the novation of Covid-19 loans with ICO guarantee, in the search for alternative financing to complement bank financing and reinforce the liquidity of companies, or in the processing of operations of the Fund for the Recovery of Companies affected by Covid-19 (FonRec) managed by Cofides. Of the latter FonRec operations, it is worth highlighting the financing by means of personal loans and equity loans for a total amount of 4,300,000 euros to an important catering group.
As Ramiro Lama, Altria Corpo’s partner and head of financing, points out, “it is in operations of more than one million euros and where companies have more difficulties in obtaining financing, where Altria Corpo can give more added value to the relationship with its clients. Altria’s in-depth knowledge of all the financial solutions available on the market and its ability to structure a proposal adapted to each need are the reasons why medium-sized companies find in Altria the right partner for their search for financing“.
The first half of 2022 also saw important milestones for Altria, such as the strong boost in activity in Madrid with the incorporation of Rubén Huertes and Fede Suárez, and the consolidation of the alliance with PKF Attest in areas that complement Altria Corpo’s offering, such as Corporate Finance, Debt Capital Markets, Technology and Legal and Tax Advisory, among others.
Altria is a Barcelona-based firm founded in 2014 by Albert Gumà. Its clients are medium and large companies, to which it offers its expertise in all types of debt and equity financing, and access to more than 170 financial providers including banks, alternative financing, public financing, debt funds and other instruments. In its almost ten 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 350 million and more than 600 operations. The scope of the companies advised covers the whole of Spain, with a concentration in Catalonia, which represents 70% of the total volume advised.
Rubén Huertes, Federico Suárez and Álex Pardillos, new consultants with proven experience to continue leading the sector.
Altria Corpo has just reinforced its team in the Corporate Finance Area with two professionals who will drive the business from its Madrid office. Rubén Huertes and Federico Suárez have a recognised track record in the financial sector and have in-depth knowledge of the corporate finance business in the medium and large company segment.
Rubén Huertes has spent 12 years managing corporate banking clients at Banco Santander and AKF Bank, where he was responsible for the factoring business. He holds a degree in Business Administration and Management from the Universidad Rey Juan Carlos in Madrid and a Master’s Degree in Commercial Banking from the Universidad de Alcalá de Henares.
Fede Suárez joins Altria Corpo after more than 20 years of successful career at Banco Santander and Banco Sabadell, where he held senior positions in the corporate business. In recent years he has promoted the management and financing of real estate assets at Aliseda and has advised on the financing of companies and real estate projects. He holds a degree in Business Studies from the San Pablo CEU University in Madrid and has complemented his training with a Master’s degree in Finance and several specialised courses in corporate financial advice.
In addition, the Barcelona team, which already had 14 people between consultants in the corporate area, the analysis team and a team specialised in external financial management and turnaround processes, incorporates a new consultant. Álex Pardillos has more than 7 years of professional experience in different roles in financial and strategic consultancy as well as in the management of Corporate and Business Banking in entities such as Banco Santander or Targobank. Álex holds a degree from the University of Barcelona and has complemented his academic training with certifications in the financial field at the University of Cantabria, IE Business School and EADA.
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 with offices in Barcelona, Madrid and Luxembourg. Its main services are advice on debt and equity financing, and access to more than 160 financial providers including banks, alternative financing, debt funds and other instruments. In its 8 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 of more than 350 million euros and more than 500 operations financed. The scope of the companies advised covers the whole of Spain, with a concentration in Catalonia, which represents 75% of the total amount advised.
In June 2021, Wallbox, the Catalan electric car charging systems company, announced its intention to list on the Nasdaq using an investment vehicle called SPAC. This SPAC provided $270 million to Wallbox for future investment and international expansion, and allowed the company to go public only after a few months, in October 2021.
What is a SPAC?
In recent years, a new investment and financing vehicle has emerged that has captured the attention of the media by allowing technology projects with high growth potential to go public. This is known as SPAC, for Special Purpose Acquisition Company.
A SPAC is a vehicle that is listed on the market without any business activity and with the sole purpose of raising funds for the acquisition of a company and making the operation profitable. The necessary capital is raised through an initial public offering (IPO).
The SPAC is a kind of simplification of the classic Initial Public Offering through which a company goes public on the stock market. In the SPAC, simplification is achieved by eliminating intermediaries and financial agents, shortening the time and cumbersome processing of an IPO.
How does a SPAC work?
The SPAC is created by a team of investors (usually hedge funds or private equity firms), and the management team are the so-called sponsors. The SPAC raises capital and in the meantime scans the market for a private company looking to go public.
Once this target company has been identified, all shareholders must agree to the deal. After the acquisition, shareholders have the option of either redeeming their shares in exchange for their initial investment or exchanging their SPAC shares for shares in the acquired company.
Sponsors have a maximum of two years after the IPO to find a target company. If unsuccessful, the SPAC is liquidated and shareholders receive their initial investment plus interest.
If the SPAC is successful, the sponsors have the opportunity to take a 20% stake in the pre-acquisition SPAC with very little money out of pocket. The promoters’ capital covers the costs of the IPO and the salaries of the team while they search for the company to be acquired and raise the money. On the side of the IPO investors, they usually receive a commitment to buy back their shares and a guaranteed interest on the amount invested as well as free options.
Pros and cons of SPAC
Among the advantages of SPAC are:
A cheaper, simpler and faster process for businesses
SPAC investors can redeem their shares if they disapprove of the takeover
A fixed valuation is agreed between the SPAC and the target company, limiting price volatility.
There are also negative aspects to consider:
“Blind spots”: when investors buy the SPAC IPO, they do not know which company will be bought and must rely on the sponsors.
Opportunity cost of being able to have uninvested money within a maximum period of two years
Difficulties in finding a target company
Historically lower returns: despite some great success stories, it is generally difficult for SPACs to beat the market. On the other hand, both promoters and shareholders who separate at the time of the merger with the acquired company tend to perform very well.
Our Managing Director, Eloi Noya, was invited by Acció – Agència per la Competitivitat de l’Empresa, the Catalan Government’s agency dedicated to promoting innovation and internationalization of Catalan companies, to give a presentation on the different alternative financing instruments available to small and medium-sized enterprises.
The presentation, entitled “From crowdfunding to tokenization”, took place on 26 April and was attended online by more than 200 companies who were able to learn first-hand about the many solutions that exist on the market and which Altria Corpo allows access to.
Among the most relevant instruments that Eloi Noya explained are some that are still largely unknown by the owners and financial directors of small and medium-sized companies, such as the following:
investment crowdfunding or equity crowdfunding, which allows capital to be raised for start-ups or companies that need equity to undertake strong growth.
private debt funds or direct lending for the medium-sized segment of companies that want to make investments with more flexible repayment financing adapted to expected cash flows.
balance sheet asset-backed financing, with imaginative solutions ranging from the use of existing fixed assets for a rent-back, to a loan secured by inventory, to the more familiar factoring or the use of customer receivables as collateral.
Eloi Noya used the last minutes of the presentation to explain the tokenization of assets, a new concept that, through digital assets, allows the ownership of assets such as real estate, art or shares to be fractioned, so that they can be used for the transmission of these assets in a blockchain environment, or to obtain financing and liquidity in a more agile, efficient way and without intermediaries.
You can see the whole speech in the following link (speech in Catalan):
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