MADRID - SPANISH property group Tremon said on Monday three of its companies have filed for bankruptcy, in yet another sign that the bubble has burst on the country's once booming housing sector.
The move follows a similar request in July by another real estate developer, Martinsa-Fadesa, which became the first victim of Spain's property crisis.
Tremon filed the bankruptcy request as it is unable to make payments on its debt of around 1.0 billion euros (S$1.93 billion), a spokesman for the group said.
The request was filed on Friday on behalf of three companies involved in promotional activities and hotel ownership.
The largest company in the group, involved in hotel management, is not affected by the bankruptcy request, he said.
'The total value of the assets is well above that of the debt, but what is lacking is liquidity,' the spokesman said. He was unable to confirm the total value of the group.
He said that 90 per cent of the debt was in the hands of a syndicate grouping several banks but which he declined to name.
The low interest rates that followed Spain's accession to the eurozone in 1999 fuelled a housing boom as Spaniards took out mortgages to buy homes for the first time or to trade up to a larger house.
The market began to suffer early last year as rising interest rates and the international lending crunch hit Spain's credit-fuelled expansion, making it hard to sell property.
Aside from Martinsa-Fadesa, which is now run by court-appointed administrators, another Spanish property group Colonial is struggling under huge debts. In September it announced losses of 2.38 billion euros for the first half of 2008. -- AFP
