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Macro Location Analysis
EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
Purpose of the loan
Financing the real estate development of a chalet in the centre of the Courchevel resort.
The operation consists of the purchase of a chalet located at 150 meters from the slopes of Courchevel 1650, one of the oldest chalets of the resort. This chalet will be deconstructed in order to realize a real estate development of 7 units with a total surface of about 521 m².
The operation is carried out by the SCCV La CALINETTE, a subsidiary of SAS PROMOCEAN which operates in the Alps under the brand name Promontagne. This real estate development company, chaired by Lionel Gernigon, is a family business founded 30 years ago in Pornichet. It has grown by developing real estate programs in the regions of Brittany, Pays de la Loire, Poitou-Charentes and on the Atlantic coast.
Mr. Gernigon is associated with the Financial Manager of the PROMOCEAN group, Mr. Pierre Arachtingi, who has been working with the Gernigon family for over 10 years. He benefits from an important relationship in the resort of Courchevel which allows him to position himself upstream on this type of real estate projects.
Raizers is solicited for the acquisition of the land and the related costs. To date, the commercialisation has not started, but once it reaches 50%, PROMOCEAN will solicit its banking partners to refinance the operation and obtain the final Financial Guarantee of Completion in order to launch the works.
Courchevel is a winter sports resort with an upscale image and many luxury hotels and shops. The price per square meter of the project is in the high range of prices offered in the sector. This is due to the new nature of the apartments and their location in the heart of the resort, 150 meters from the slopes.
Commercialisation is outsourced to Immobilière Courchevel (the oldest real estate agency in the resort). Because of the covid, the commercialisation has been strongly impacted. Sales should start this summer. See the ad
PROMOCEAN has 36 months to reach the 50% of commercialisation in order to obtain the Financial Guarantee of Completion and thus have the possibility of refinancing from its usual financial partners.
The operation is carried out by SCCV La CALINETTE, a subsidiary of SAS PROMOCEAN, with a capital of 2,060,000 euros, registered in the Saint-Nazaire Trade and Companies Register under number 382 671 014, on 02/08/1991,
SCCV La CALINETTE, which is carrying out the operation, is held at 50 % by its parent company, SAS PROMOCEAN, which is going to carry the bond loan, and 50 % by MAPI the SARL of Mr. ARACHTINGI.
The bond will be issued by SAS PROMOCEAN at an annual rate of 10% per year, for a duration of 36 months. The interests are paid annually, but guaranteed for a minimum period of 6 months.
In order to provide additional guarantees, the repayment of the bond issue is guaranteed by :
* Trust security on the shares of SCCV La CALINETTE
* Personal guarantee of Mr. Lionel Gernigon
* First demand guarantee up to 900 000€ from the insurer CHAUCER rated in 2020 :
- A (excellent): by AM BEST
- A+ (Strong): by Standard & Poor's
- AA- (Very strong): by Fitch
The bond contract provides for early redemption if:
* Refinancing of the operation by a bank
* Delivery of the operation
It should be noted that this is a pessimistic scenario with a 36-month interest payment. The operator favors a bank refinancing which would allow to increase the margin to 20% of the turnover over 24 months including management fees.
For each operation, the operator creates a dedicated structure.
* SAS PROMOCEAN :
This real estate development company is a family business founded 30 years ago in Pornichet. It has grown by developing real estate programs in the regions of Brittany, Pays de la Loire, Poitou-Charentes and on the Atlantic coast. He operates in the Alps under the brand name Promontagne.
Since its creation, the company has delivered 3,000 homes out of 100 programs. The group has also developed its commercial activity with the help of 2 real estate agencies. After a first historical establishment in La Baule, the second is located in Vannes.
The founder and CEO of the company is Lionel Gernigon (69), who works in tandem with his 34-year-old son, the company's general manager.
* MAPI :
Mr. Arachtingi is currently the Chief Financial Officer of the PROMOCEAN group and has been working with the Gernigon family for over 10 years. As mentioned above, he has a long-standing relationship with the resort of Courchevel.
In order to carry out this program, he has joined forces with the PROMOCEAN group, via its MAPI structure, for the 5th time. After having realized the programs "Les Grandes Bosses", "Le Praslin", "La Baule 117" and "Alzeto".
Balance sheet of SAS PROMOCEAN
Income statement of SAS PROMOCEAN
It should be noted that the Group's accounting method is based on completion. Thus, the program margin is recognized in the year of delivery, while commercialisation fees are recognized in the year they are invoiced, generating significant negative results for the subsidiaries at the beginning of the program, representing approximately €750,000 in 2020.
Balance sheet of SARL MAPI
Income statement of SARL MAPI