TTR DealMaker Q&A with Ramón y Cajal Abogados Partner Amado Giménez Bono
Amado Giménez Bono is partner within the banking & finance department at Ramón y Cajal Abogados. His practice encompasses almost all aspects of finance transactions including debt restructuring and refinancing (over 100 deals) during his career, structured corporate finance, project finance (renewable energy, water, and infrastructure) LBOs and MBO´s. He regularly advises main Spain banks and financial institutions, as well as debt funds, advising also listed and unlisted companies/sponsors
TTR – In terms of company restructurings, what is the current situation and what are the prospects for the following months?
A.G.- It seems that the measures taken by Public Authorities in terms of elapsing insolvency periods is letting companies take time to evaluate their situation prior to making a decision as to filing for bankruptcy or a pre-insolvency scheme or not.
Despite such measures, there is still a number of companies struggling to survive that have more concerns than just the insolvency liability periods being suspended/extended, thus liquidity constraints derived from stopped activity and income are blocking their businesses. Liquidity introduced via State Guarantee schemes seem to have been useful but there is a general feeling that such measures are only a starting point of a long and tough journey.
We anticipate a very heavy work load for the upcoming months in terms of restructuring deals.
TTR – What type of companies has been more affected by COVID-19?
A.G.- Tourism (in a wide sense, hostelry, restoration, etc.), automotive components, and in general all sectors that depend on a physical presence for trade to produce, such as retail for instance.
TTR – How would you describe the measures taken by the Spanish Government to weather the business crisis caused by COVID-19? Do you think additional measures are needed?
A.G.- As described above, the measures taken so far seem to have given relief to the first wave, but a clear picture of the effects of the Covid-19 Pandemic seems yet to come; so it is difficult to evaluate the accuracy of such measures.
State Guarantee schemes have proven to be useful in a first stage (although its implementation in the beginning was not as smooth as desired), but increasing debt levels may not be a solution itself in the long run for businesses that have been literally closed for weeks.
Let´s see how political negotiations take place and how the EU bazooka is channeled into the Spanish economy/companies.
TTR – Regarding the M&A sector, do you think the health crisis has generated business opportunities? Which sectors do you think are more interesting for financially strong investors?
A.G.- It seems that the green energy industry is going to take an important role in the post-pandemic Spanish M&A scheme, but I guess not the only one. It will depend, at a first stage, whom will be the first one in put price to certain assets.