Nueva Rumasa bought up by 'vulture fund'

Back in Business, a small firm specializing in restructuring companies, announced on Friday the purchase of the notoriously insolvent Nueva Rumasa group, owned by the Ruiz Mateos family, in a deal reportedly valued at 1.5 billion euros.

Back in Business sources did not say more about the figure or whether it will be enough to meet all of Nueva Rumasa's debts. However, they acknowledged that the acquisition was "a very complex process."

The buyer specializes in reorganizing companies in difficulty - commonly known as a vulture fund - and is owned by entrepreneur Ángel de Cabo, who last year, through Posibilitum Business, took over Viajes Marsans, another troubled company. Marsans, which was owned by the former president of the business leaders association CEOE, Gerardo Díaz Ferrán, was liquidated after it was unable to meet all its debts.

After five months of negotiations, Back in Business has acquired all the parent companies that make up Nueva Rumasa. Back in Business said that it is assuming control of the group to "examine all lines of the business and take the necessary measures in order that the companies can become profitable and satisfy creditors."

The transaction was a confidential one. A company spokesman said that neither the Ruiz Mateos family nor the new managers will clarify the terms of the purchase. "We won't be expanding on the information beyond what has been said in the press release," a spokesman said.

The Ruiz Mateos family has it decided to go with Ángel Cabo's purchase offer "over the many received in recent months" because he has "shown in-depth knowledge and has proven group management and financial solvency."

"We believe this is the best possible alternative for the workers, suppliers and customers," the family added.

José María Ruiz Mateos said in the release that one of the decisive reasons he selected Back in Business was "the commitment by the new owners to continue with the obligations undertaken by Nueva Rumasa with investors who showed their confidence in us."

In a document sent by Álvaro Ruiz Mateos, son of the controversial businessman José Maria Ruiz Mateos, obtained by Efe, the family was "forced to sell" after being "removed from the management of many of their companies and without having access to information."

In February, Nueva Rumasa filed for bankruptcy protection in an effort to renegotiate its outstanding debt with its creditors - reportedly listed at 76 million euros - and to avoid being declared insolvent. Legal sources told Efe that the family still has to notify the bankruptcy court about the change in ownership.

The original Rumasa group was expropriated by the government in 1983 with huge debts. The group, which owned food and dairy brands such as Clesa, Duhl and Trapa, as well as the Rayo Vallecano soccer team, has been suffering from severe cash-flow problems and has tried to raise money through different controversial investment offerings.