99
The heading “Compensation for termination of the Hotel NH Bühlerhöhe lease” includes the liability corresponding to the part of the compensation
to be paid to the hotel’s owner for termination of the long-term-maturity lease agreement. At 31 December 2014, compensation liability was €3,915
thousand which is expected to be settled in full in 2015 (see Note 25.6).
24.- THIRD-PARTY GUARANTEES AND CONTINGENT ASSETS AND LIABILITIES
Financial institutions had granted surety to the Group for an amount totalling €22.05 million (€21.68 million at 31 December 2013) which, in general
terms, guarantee the fulfilment of certain obligations taken on by the consolidated companies in the performance of their activities.
At 31 December 2014, the Group had taken out insurance policies to cover risks arising from damage to material goods, loss of profits and third-party
liability. The capital insured sufficiently covers the assets and risks mentioned above.
Commitments to third parties
- A Group company currently acts as co-guarantor for a syndicated loan granted by two banks to the associate Sotocaribe, S.L. which at 31
December 2014 had an outstanding principal of €19,508 thousand with final maturity in 2014. On 23 September 2014 a novation was signed
to extend the loan maturity to 2015.
- On 10 March 2006, NH Europa, S.A. and Losan Hoteles, S.L. (now Carey Property, S.L.) signed a shareholders’ agreement on Losan Investments
Ltd. (the owner of the Kensington Hotel), by means of which, should Losan Investments Ltd. receive an offer to purchase 100% of its shares at
a price deemed to be a market price, Losan Hoteles, S.L. (now Carey Property, S.L.) may require NH Europa, S.A. to transfer its shares to the
third party who made the offer and the latter will be obliged to accept. However, NH Europa, S.A. will have preferential acquisition rights over
shares held by Losan Hoteles, S.L. (now Carey Property, S.L.) in Losan Investments, Ltd.
On 25 March 2009, Sotogrande, S.A. granted the non-controlling shareholders of Donnafugata Resort S.r.l. representing 30% of its share capital
a put option. On 20 October 2010, the shareholders of Compagnia Immobiliare Azionaria, S.p.A. and Repinvest Sicily S.r.l. gave notice of their
intention to partially exercise the above-mentioned put option in accordance with the agreement signed by the parties in March 2009. An
independent expert was commissioned to appraise the company as a consequence of this notice. Sotogrande, S.A. considered this expert’s
valuation of the company to be excessive and far from its real value, and began arbitration proceedings in which it challenged the independent
expert’s report. On 26 October 2012 the arbitral tribunal issued an award in which it confirmed the valuation of the independent valuer. Sotogrande,
S.A. lodged an appeal against this award and the hearing has been set for 23 February 2016. On 15 November 2013, CIA and Repinvest Sicily
filed new arbitration proceedings seeking for Sotogrande, S.A. to be ordered to pay €9,900,000 plus €11,451, plus interest, in accordance with
the valuation stated in the aforementioned ruling. On 3 December 2014 the tribunal issued a ruling ordering Sotogrande, S.A. to pay the sum of
€10,673,484 fully provided for. Due to the operation described in Note 2, the Group stood in for Sotogrande S.A. in this dispute.
- In the context of operations in the Caribbean, and within the management contract for the Real Arena complex, there is a commitment by the
management company to obtain a minimum profit.
Contingent assets and liabilities
The Group’s main contingent assets and liabilities on the date these consolidated financial statements were drawn up, are set out below:
- In 2008, a Group subsidiary in Italy terminated a service agreement with the construction company in charge of building a tourist complex
being developed by said subsidiary on the grounds of several breaches of contract. As a result of this termination, the construction company
filed a suit against the Italian company claiming damages in the amount of approximately €15 million.
- The Group company in Italy has filed a counterclaim, affirming that the termination was due to breach of contract and for this reason,
compensation of approximately €33 million is being claimed from the construction company. The tribunal appointed a technical expert, who
quantified the damages in the construction company’s favour at approximately €1.4 million, and in favour of Donnafugata Resort S.r.l. at €6.4
million minimum and approximately €9.1 million maximum.
- The Italian company has already received €5.1 million in payment for the damages from the first-demand bank guarantee provided by Intesa
San Paolo, S.p.A.; in order to seek payment of any additional damages, it must be borne in mind that the construction company would pay a
part under the terms of the court approved restructuring plan.
- However, for reasons of prudence and given the financial situation of the Group, on 31 December 2014, the attached consolidated balance
sheet includes a liability for the sum of €6,771 thousand under the heading “Assets available for sale”.
- The owner of a tourist complex has initiated arbitration proceedings against Donnafugata Resort S.r.l., claiming damages for a delay in
construction work and demanding demolition of part of the work and the execution of some additional work. The Italian company has filed a
counterclaim for, among other things, errors in the maps attached to the lease agreement, which gave rise to errors in the sizes of the plots.
The Directors, following the opinion of their legal advisers, have not made provisions for the amount, as they consider it will probably not be
needed.
- NH Group has appeared in the insolvency proceedings of Viajes Marsans, S.A. and Tiempo Libre, S.A., from the unsettled estate of Gonzalo
Pascual Arias and Gerardo Díaz Ferrán, and in the voluntary insolvency proceedings against María Angeles de la Riva Zorrilla, in order to claim
outstanding amounts. Said balances were provisioned in consolidated financial statements in the amounts deemed not recoverable.
- The owner of 4 hotels in the Netherlands made a claim for a payment of €2,723 thousand from a Dutch subsidiary because there was
supposedly a change of control in 2014, and this supposedly gives it the right to claim a penalty, according to the lease. The notification was
accompanied by the written demand, and it announced it would go to court if the Dutch subsidiary does not pay within 8 days of 19 February.
The Directors, in accordance with their legal advisers, consider it unnecessary to register a provision for this item at present.
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
