Spain aims to reduce carbon emissions to zero by 2050, according to the new draft climate change law, which sets out an ambitious set of targets to tackle global warming over the next 30 years. The bill is expected to be passed by the Spanish Parliament during the spring of 2021.
The law envisages that at least 70% of the country’s energy will have to come from clean energy sources, such as wind and solar, and all new coal, oil and gas extraction projects will be banned. This bill goes hand in hand with the Paris Climate Agreement, a global framework to limit global warming to well below 2ºC, and is also expected to shape the country’s economic recovery from Covid-19.
Although the plans are ambitious, Spain has already come a long way in reorganising the electricity market in favour of renewables. Consumers have been given more flexibility to switch electricity suppliers, giving green energy companies the opportunity to offer competitive tariffs while supplying electricity from 100% renewable sources.
More recently, the removal of the controversial “sun tax” in Spain has paved the way for more businesses and households to generate their own electricity using rooftop solar panels. With more than 300 days of sunshine a year, Spain is undoubtedly the perfect place to generate electricity from solar energy.
The new legislation on solar photovoltaic panels goes even further and allows those who generate solar energy to be financially compensated for the surplus energy they produce, which can be fed into the national grid.
In addition to the legislative changes, which allow businesses and consumers to generate and consume renewable energy, the government is committed to installing a minimum of 3,000 MW of wind and solar power per year for the next ten years.
Altria Corpo is particularly active in the search for financing solutions for companies that are developing renewable energy projects. There are financial providers specialised in this type of financing, to which Altria Corpo can provide access and can facilitate the management of the entire application, analysis and due diligence process for each project.
These incorporations consolidate the firm as a leader in Catalonia in financial consultancy for medium and large companies.
Altria Corpo has just strengthened its team in the Corporate Finance Area with two professionals, Sergi Martínez and Oriol Martí, who have in-depth knowledge of the corporate finance business in the medium and large company segment.
Sergi Martínez joins Altria Corpo after a successful 24-year career at Banco Santander, where he has held management positions in the corporate and institutional segments and led commercial teams at the bank. He is also an academic collaborator in various business schools. Sergi Martínez holds a degree in Actuarial and Financial Sciences, specialising in Business Management and Administration, from the University of Barcelona. He holds an Executive Master’s degree from EAE and has taken several specialised courses in business risk analysis.
Oriol Martí has more than fifteen years of experience in the financial sector in institutions such as Deutsche Bank and Citibank, where he has developed commercial and managerial functions within the corporate area in Barcelona, Madrid and Hamburg. He has also managed business projects in the last five years. Oriol Martí holds a degree in Economics from the Universitat Pompeu Fabra and a Master in Financial Management from ESADE.
With these additions, the Altria Corpo team now comprises eleven consultants in the Corporate Area, together with an analysis team and a team specialised in external financial management and the handling of restructuring and turnaround situations.
On 28 January, AltriaCorpo presented the results of the First Alternative Finance and Fintech Business Barometer, carried out jointly with the Institute of Financial Studies (IEF).
For this Barometer, a total of 120 in-depth interviews were conducted with companies, financial institutions and alternative finance providers, who were asked about their experience and perception of the availability of credit, the outlook for 2021 and the degree of knowledge and use of alternative finance and fintech instruments.
All banks will tighten their lending policy and most plan to raise interest rates.
Alternative finance providers are divided on whether or not to tighten lending policies, and have no plans to increase interest rates.
The lack of awareness of alternative finance among companies is still 33%, and when it comes to fintech (a subgroup of alternative finance that offers online platforms and greater agility) this lack of awareness rises to 59%.
70% of companies will actively seek financing during 2021, but 84% of them are aware that it will cost them much more than the previous year due to the shrink of bank credit.
The lack of awareness of alternative financing together with the high availability of bank credit in recent years are the main reasons that financial agents find to explain why the growth targets for alternative financing set by the European Union and the Capital Markets Union have not been met.
The extension of the grace period in ICO credits that the government is preparing will not be enough. Companies must plan and make decisions now to overcome the difficult 2021.
As of March 2021, the financing lines guaranteed by the ICO should begin to be paid back by the companies. However, for many of them, the one year grace period that these credits have seems too short in view of the evolution of the pandemic and its undoubted impact on the economy. Even with an eventual improvement in the health situation and the economy in the next half year, the reality is that the volume of debt that companies have generally incurred is too high to be able to repay these loans without liquidity tensions.
Faced with this outlook, and pressure from companies and financial institutions, the Spanish Government is taking measures and in all likelihood is going to extend the grace period, to one more year until 2022, and extend the term of the loans from five to eight years. Banks and businesses will welcome these new conditions. On the part of the financial institutions, they have assumed a risk of 25,000 million Euros which, if the number of defaults increases, could lead to significant provisions and even cause some banks to fall into losses. On the part of the companies, the situation is serious in many of them, and even a recent report by Alvarez & Marsal indicates that 14% of the companies will probably disappear due to the effects of the economic crisis and the inability to repay the debt incurred.
In spite of this relief in the repayment terms of the ICO credits, it seems clear that the companies cannot rely only on this measure, which also still needs the approval of Brussels, so it may suffer changes in the negotiation with the European authorities, among them the European Central Bank, which must approve this measure, and in such approval could set the mandatory provisions in case of increased grace periods and repayment terms, which in practice would mean that it could not be applied by the banks due to the increased cost it would entail.
In short, there is an urgent need to anticipate an economically very complicated and financially very tense scenario. It is crucial at this time to protect the cash flow and look for new financial instruments that can either cancel the existing debt that generates a higher monthly service for another much longer term that substantially reduces this service, or capitalize the companies to strengthen their solvency, resist the decrease in income and profits and bet on the digitalization and the implementation of new business lines.
At Altria Corpo we are actively managing our clients to find the best solution to overcome this coming year. Despite the difficulties of the credit market and especially the caution of many financial institutions, there is still a variety of possibilities, both in the area of restructuring bank debt, with the help of debt funds and other similar alternative financing instruments, and in that of other financial solutions that operate with the guarantee of the company’s assets, both real estate and productive equipment, or even the stock itself. Without forgetting the possibilities that the entry of equity offers, be it venture capital funds, or industrial partners or those with a more permanent vocation.
These are moments where, in order to achieve a solution that gives economic and financial viability to the company, a high knowledge of all the possibilities that exist in the financing market is required, as well as the capacity to prepare a complete dossier where the current financial statements are clearly explained and above all, an economic and treasury projection of the company for the next months and years can be made. The help of an expert advisor is, without a doubt, more necessary than ever at this time.
Altria Corpo is a financial consultancy founded in 2014 by Albert Gumà and based in Barcelona. Its clients are medium and large companies, to whom it offers its experience in all types of debt and equity financing, and access to more than 150 financial providers including banks, alternative financing, debt funds, public funds and other instruments. In its 7 years of existence, Altria Corpo has positioned itself as a reference in the search for financing for medium and large companies, with an accumulated advised transactions worth of more than 250 million and more than 600 operations. The scope of the companies advised covers the entire Spanish territory, with a concentration in Catalonia, which represents 80% of the total amount advised.
“It’s key to have partners like Altria who can help to shield the financial needs in such an uncertain environment”
Our country is a world tourist power. The tourism sector is in fact the one that provides most employment and contributes most to the Spanish economy with almost 15% of the GDP. It is not surprising, therefore, that in the numerous portfolio of clients that Altria Corpo advises are some relevant companies in this sector.
One of these companies is Torremirona Golf & Spa Resort. We wanted to talk to its General Manager, Yassine Bouallalla, so that he could tell us about his experience with Altria Corpo.
Altria Corpo: Yassine, tell us a little about Torremirona and what your career has been up to now.
Yassine Bouallalla: The Torremirona Golf & Spa Resort complex began its activity in 1989, with the inauguration of the golf course, and later consolidated in 1998 with the opening of the hotel establishment to generate a complete product. The objective has always been to offer a multi-service establishment, with the capacity to adapt to all the needs of both guests and visitors, being a reference point in the territory in terms of the service and quality offered, the deseasonalisation and the link with the territory.
A.C.: It is always said that the secret of the hotel product is the location. You are in Navata, near Figueres, in the province of Girona. What possibilities does this give you?
Y.B.: The complex has a strategic location that allows its users to enjoy the whole province of Girona, while facilitating communication with their respective locations due to the proximity of the AVE and motorway services. However, location is not everything, and we complement the fact that it is not a coastal product with many different products and services.
A.C.: You’ve had significant growth in recent years. What have you based it on?
Y.B.: As of 2014, the establishment began a process of transformation and dynamization, further strengthening its versatility and focusing on being a product of leisure, culture, sports and gastronomy, with the construction of a new SPA, the adaptation of the sports facilities and the renovation of the rooms and their common spaces.
A.C.: The relationship with Altria Corpo started some time ago. What was the reason for contacting us?
Y.B.: We had positive references from Altria Corpo, and due precisely to this process of transformation mentioned above, there were financial challenges to accelerate the change and adaptation of the product to the new reality of demand arising from the previous economic crisis and above all the process of social digitalization and its consequences. Altria is a benchmark when it comes to optimizing the time spent by a company in obtaining and negotiating the necessary resources. The first contact was close, relaxed and direct, making clear the knowledge of the financial sector and its areas of action. Since then, the relationship is fluid, two-way and with many synergies between the two parties.
A.C.: What do you think have been the main benefits of having worked with Altria?
Y.B.: Above all, the assertiveness and ease of management they give to the companies they work with, their network of relationships and their ability to be effective in finding the product that best fits each need or type of business. During the procedure, needs are analyzed, projections are contrasted and scenarios are worked on together until a consensus is reached. Afterwards, the management and follow-up are pleasantly efficient, and the way of adapting, impeccable. I believe that in the end the main benefit is to have gained a “partner”.
A.C.: In the last few months Altria Corpo has obtained a relevant amount of financing for the Torremirona complex, with different lines and instruments. What will you use the financing obtained for?
Y.B.: The financing will be used mainly to continue investments in order to meet the objectives of positioning and quality of the establishment, and to strengthen the position of the product in the territory, as well as to ensure the proper functioning and liquidity in an uncertain time where forecasts are constantly being changed. This is a period of transition, in which the key to financing is to guarantee the continuity of the business by facilitating its economic survival from securing its finance first.
A.C.: As you say, these are very uncertain times in all areas. As far as the financing market is concerned, how do you see it right now?
Y.B.: It is difficult to predict the behaviour of the economic fabric in the medium term, but the degradation of a large part of the service industries, especially those related to transport and tourism, as well as the evident recession that is being experienced in the whole of the territory, makes it difficult for companies to have positive cash flows in the medium term. Precisely for this reason, it is necessary to have precise forecasts, to act responsibly and to have strategic partners who can help to shield the financial needs that guarantee the future of the business fabric.
A.C.: Well, Altria Corpo will continue to be your partner in helping you in this complex environment. Thank you very much, Yassine, for your answers.
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