Aedas Homes, S.A. (HOME) Earnings Call Transcript & Summary

Hi. Good afternoon, everyone. My name is Jose Cravo, and I'm the Head of Investor Relations at Neinor Homes. Today is a very special day for Neinor as we are announcing the transformational transaction that will shape the future of the Spanish residential sector. As usual, we are here with Borja Garcia-Egotxeaga, our CEO; Jordi Argemí, our Deputy CEO and CFO; and Mario Lapiedra, our CIO. We will start the presentation with the key highlights of the transaction. Then on Section 2, Jordi will explain the terms, the structure and the rationale. On Section 3, Mario will go through the overview of AEDAS and the portfolio underwriting. On Section 4, Jordi will provide an update of Neinor's strategic plan post transaction, and Borja will finish with the key takeaways. After the presentation, there will be a Q&A session to answer any questions you may have. Now I'll hand over the presentation to our CEO, Borja Garcia-Egotxeaga.

Thank you, Jose. Before we get into the details, I want to emphasize today, we are facing an extraordinary milestone for Neinor Homes and for the Spanish residential real estate sector as a whole. We are proud to announce the launch of a voluntary takeover offer for up to 100% of AEDAS Homes with the full support and agreement of its main shareholder, Castlelake. This is a huge transformational transaction for Neinor. Please let me start this presentation highlighting 3 aspects. First, the opportunistic returns in scale and the risk portfolio. We are acquiring a high-quality cherry-picked portfolio of over 20,200 units, 50% located in Madrid, one of the largest metropolitan areas in Europe and Spain's most liquid and dynamic housing market. This portfolio offers strong cash flow visibilities, over 9,000 units currently under construction and nearly 4,000 units presold, representing EUR 1.7 billion in secured future revenues. And we are doing this with conservative underwriting, a 30% discount to NAV and acquiring land at just EUR 634 per square meter. This is one of the most attractive entry points we have seen combining quality, location and visibility with deeply compelling economics. The second message is that this is accretive for shareholders from day 1. We are committing EUR 1.07 billion, EUR 750 million through senior secured notes and EUR 500 million in equity fully committed by Neinor and the main key long-term shareholders. This structure delivers outstanding returns, targeting plus 20% IRR and 1.8 multiple, EUR 450 million uplift in net income by 2030 and EUR 900 million of net cash flows, allowing EUR 500 million in shareholder distributions over the next 3 years. It is also equity efficient, driving return on equity to 15% to 20% by 2027, with loan-to-value remaining under 30%. Simply put, we are scaling profitability and with discipline. This deal accelerates our strategic plan without compromising on risk or quality. And the third big message is that we are positioning Neinor as the leading residential platform in Spain. With this transaction, Neinor will control the largest land bank in Spain, over 43,200 units, including 27,000 fully owned. This is a national footprint with real scarcity value. We are becoming the go-to platform for institutional capital, public and private, seeking long-term exposure to the Spanish residential market, the fastest-growing economy in Europe. We are also reaffirming our leadership in affordable and social housing, where Neinor is delivering scale, purpose and public-private alignment. And finally, we are unlocking operational synergies. Our combined platform allows us to scale more efficiently in an undersupplied market, improving cost structures and accelerating delivery capacities. Most important, we are bringing together the best people and platforms in the sector. This is a powerful step forward operationally, financially and strategically. We are not just building homes, we are building the future of residential real estate in Europe. Now I pass the word to Jordi and Mario, who will explain the transaction, the strategic lines, the uplifts for Neinor Homes and the portfolio underwriting.

Thank you, Borja. Let's move to the next section, the transaction terms and rationale. In Slide 6, you can see the structure and mechanics of the offer. First, we have set up a ring-fenced SPV fully owned by Neinor with EUR 1.2 billion of committed funding in place. This includes EUR 750 million of senior secured notes initially subscribed by Apollo and EUR 500 million of equity, out of which EUR 225 million comes from cash at Neinor level and EUR 225 million comes from a capital increase in Neinor Homes being fully underwritten by our key main shareholders. Second, the offer is a voluntary tender for 100% of AEDAS priced at EUR 24.485 per share. After adjusting the dividend and treasury stock, the effective acquisition price comes to EUR 21.335 per share, which implies a total acquisition price of EUR 922 million. Third aspect, we have secured a hard irrevocable commitment from Castlelake, which holds 79% of AEDAS. It gives us strong visibility and momentum towards the closing. And fourth and last aspect, the authorization required to close the deal. On one side, the approval by Neinor's GSM. This is a mere formality as we gather full support from the largest owner of both companies. On the other side, we need clearance by the CNMC, which is the antitrust authority, and by CNMV, which is the market regulator. Regarding antitrust, we don't expect any issue nor remedy since the Spanish housing market is highly fragmented and the 2 portfolios are complementary. And regarding market regulator, we need the approval of the prospectus of the voluntary tender offer. And finally, we need green light from the Foreign Direct Investment Board, but also we are confident that we will secure this as Neinor is a Spanish company. So we expect all these milestones to be concluded by the fourth quarter of the year. Bottom line, this is a clean, fully funded transaction with a high degree of execution visibility. With that said, let's move to the next slide. On this slide, I would like to highlight 3 main ideas. First, the quality of the land bank and the significant level of execution already embedded in this portfolio. Mario will go into further details later in this presentation, but it's important to emphasize that it is not a speculative pipeline. It is a high-conviction and high-visibility portfolio. Second, the returns. We are targeting opportunistic IRRs of over 20% and a cash-on-cash multiple above 1.8x. These metrics are supported by 2 key elements: the acquisition price at a 3% discount to net asset value and in line with book value. This means we are acquiring premium quality portfolio at a very attractive entry point. And the second element is that the speed at which we can derisk investment. We expect a full payback within the 3 years, thanks to AEDAS' active and highly liquid portfolio. Let's now look at some additional investment highlights. Our underwriting approach is intentionally conservative. We have to assume no housing price appreciation beyond today's market levels. If we were to increase this by just a modest 2.5%, it would generate an additional EUR 100 million in profit, pushing IRR to 25% and the multiple to -- cash-on-cash multiple to above 2x. To put that in context, Spain has experienced annual price depreciation of 4% to 5% in recent years. Our acquisition approach is also conservative. The order book of EUR 1.1 billion will generate roughly EUR 600 million of net cash that, together with existing cash at the target level adjusted by the dividend, implies that more than 75% of the purchase price is already covered. This means, in other words, that we significantly limit the downside risk through a quality -- high-quality liquid portfolio while retaining upside potential on the remaining land bank. Also important to comment that our assumptions exclude synergies. We are not relying on procurement and commercialization savings for this deal. Instead, our focus is on operational excellence, on executing well running the 2 entities. Strategically, this transaction improves Neinor's scale and position us as the leading residential platform in Spain, as Borja was saying 1 minute ago. And finally, this company will play a meaningful role in the Spanish society. As shown in Section #2 of the appendix, Neinor and AEDAS together will deliver nearly 9,000 affordable rental homes, half in Barcelona and half in Madrid. In Slide 8, you can see that post transaction, we will manage a land bank of approximately 43,000 residential units, making us the leading residential platform in Spain and one of the largest in Europe. 64% of this land bank is fully owned. The rest is managed through third-party and asset management agreements, delivering capital-light exposure and recurring fee income. As you can see in the map, the portfolio is well diversified but also strategically concentrated. Almost 40% is in the Central region, including Madrid, the most dynamic housing market in Spain. And this is not just land, it's high-quality projects and in the best regions. With that said, follow me to the next slide. This slide highlights how Neinor has established itself as the partner of choice for institutional investors seeking exposure to the Spanish residential market. Now with this deal, we truly believe we will continue to scale Neinor's asset management business in the coming years, fueling equity growth -- equity-efficient growth into future earnings. With that said, let's move to the next slide. To conclude this section, I would like to emphasize that the current macroeconomic situation further enhances the value of this transaction. First, Spain is expected to continue leading GDP growth in the coming years, being above European countries and even above the U.S. Second, interest rates are also decreasing, being now at around 2%. And this shift is significant. It indicates that inflation is under control. And more important, it improves affordability for our clients who can now access more favorable financing for the homes we deliver. With this said, let's move to the next slide to take a closer look at the fundamentals of the Spanish residential market. This slide highlights some of the key factors that make Spain one of the most resilient and attractive residential markets globally. On the demand side, over the past 5 years, we have been -- or we have seen a strong acceleration in both population growth and household creation. Looking ahead over the next 5 years, which aligns with the period during which we will monetize for the AEDAS portfolio, forecast suggests that these trends will not only continue but may even accelerate further. And on the supply side, housing production remain constrained. Today, we are delivering approximately 100,000 to 110,000 new units annually, a figure that may increase slightly but will still be below by far the underlying demand. All in all, this is a great transaction and the macro and micro situation should amplify its potential. With that, I will now pass the word to Mario that will comment on the underwriting of the portfolio.

Thank you, Jordi. In this section 3, I will walk you through the core and basics of the transaction that are the assets of AEDAS' portfolio and our underwriting approach, which, as mentioned earlier, has been always conservative and very disciplined. Let's start with the asset perimeter. AEDAS brings approximately 20,000 residential units, out of which 75% comes from the fully owned perimeter, main driver of the transaction, and then residual 15% coming from the existing JVs with third parties and 10% from units only managed without equity stake. By use, 80% of the portfolio is dedicated to build-to-sell, core business as for Neinor Homes with very strong fundamentals. 12% are concessions from public-private collaborations and finally, a minimal exposure to flex living and build-to-rent. By location, all the units are located in the most dynamic markets in Spain and where the imbalance between supply and demand is more obvious. But clearly, the jewel of the portfolio is the exposure to Madrid with almost 50% of the total units concentrated in this market that today is one of the most dynamic worldwide. The rest are located in Levante region with 17% of the units in Valencia and Alicante mostly, 14% in first residential locations in the South region as Málaga and Seville, 10% in prime areas for second resi in Costa del Sol and finally, residual exposure to Catalonia and Basque Country. In summary, all locations are highly complementary to Neinor exposure and markets we know very well. Finally, I would like to highlight the liquidity and advanced execution stage of this portfolio with almost 70% of the units active and $1.7 billion order book. This level of maturity provides strong short-term cash flow visibility and significantly reduce execution risk, a key consideration in our underwriting. Let's move to the next slide. On this slide, we are zooming in on the portfolio in the Madrid region. Some years ago, when we acquired Quabit, one of the main asset drivers was the Alovera hub that years after has been demonstrated as a big success. But by that time, we needed to make an effort to educate the capital markets community in this location rationale. Today, the main driver of AEDAS' portfolio do not need deep explanation as it is a no-brainer investment with exposure in consolidated Madrid markets as Berrocales, Ahijones or Valdecarros in the Southeast, portfolio of Retamar or Brunete in the high-end areas of the West and Castellana Norte or Carriles in the North. When we layer this on to Neinor's existing positions in the North with Los Carriles and in the East with Alovera, we are effectively creating what we believe is the most strategic and best positioned land portfolio in the Madrid region. Altogether, we are talking about nearly 9,000 units in Madrid to be delivered over the coming years with strong diversification, excellent fundamentals and substantial value creation potential. I want to emphasize that Madrid is currently the second largest metropolitan area in Continental Europe and one of the regions with the strongest projected population growth in the coming years, making it a highly strategic market for residential development. If we move into the next slide, we are going to translate all of this into euros. On this slide, we detail our conservative underwriting approach of the fully owned portfolio that is composed of more than 15,000 units that will generate EUR 5.1 billion in revenues without applying any HPA and EUR 900 million contribution margin. At the top of the slide in red, you can see the 6,400 units of the portfolio that are currently under production, which includes finished product, work in progress and projects under commercialization. This bucket is generating EUR 2.5 billion of revenues, out of which circa EUR 1 billion is already presold and EUR 300 million contribution margin in the next 3 years. As you can see on the expected GDV by bucket, our average selling price range from EUR 2,900 per square meter to EUR 3,500 per square meter, demonstrating our conservative approach and that we keep the affordability as an important KPI. And on the margin distribution, we have done, as always, a risk-return balance, applying 5% contribution margin to the finished product, 13% average margin to the WIP and 18% margin for the developments under commercialization. At the bottom in black, we show the land bank, representing circa 9,000 units and generating EUR 2.6 billion in revenues and EUR 600 million contribution margin. By strategy, we have split the land bank between assets to be developed and the land to sell assets. The to develop bucket are the land plots that we can develop and deliver before 2030, generating a GDV of EUR 2 billion with euro square meter of EUR 3,600 and a contribution margin of 20%. The sale assets bucket are very good land plots that we foresee to use them mainly to fit our asset management business or that we will not be able to develop and deliver before 2030 because of concentration, urbanization phase, et cetera, but -- mainly some phases of Berrocales, Ahijones or Valdecarros and prime assets as Montegancedo portfolio or Carriles in Alcobendas. In this bucket, we are applying an average exit price, fully urbanized, of EUR 1,300 per square meter with a contribution margin of 30%. Finally, I want to highlight the acquisition price. With the underwriting explained above, without HPA, we are acquiring the full portfolio at EUR 1,000 a square meter. And if we exclude the finished product and the WIP, we are acquiring the land at EUR 634 a square meter average. This represents a fantastic entry price, more in line with individual land prices of 3 or 4 years ago. Please follow me to the next 2 slides so that you can get a sense of both active and nonactive land bank. Here, we have highlighted some representative projects that are either under construction or already completed. As you can see, there is a diverse mix of product types, including multifamily, single-family and detached homes. From a product standpoint, this is a high-quality, well-designed housing targeted at the mid- to high segment of Spain's residential market with average unit prices ranging from EUR 300,000 to EUR 1 million, very similar to the product we deliver in Neinor. Now let's move to Slide 18 and take a closer look to the top land bank assets. On this slide, we have highlighted the top 10 land bank assets that showcase the quality of the portfolio. These 10 assets represent almost 40% of the portfolio with potential to develop over 5,000 units, mostly in Madrid and other top tier regions, and we are acquiring them below EUR 1,000 per square meter. At this entry price, just holding the land plots the next 3 years and selling them would be doing a 1.5, 1.6x multiple. In other words, the future margins are highly derisked from the operational execution due to the low entry price and the solid fundamentals of supply and demand. Please follow me to the next slide to conclude with this section. On this slide, we present the illustrative and aggregated P&L for AEDAS through 2030. The chart above outlines the annual delivery schedule, not including the land sales. As you can see, it's relatively stable, ranging from 1,500 to 2,000 units per year with a lower estimation in 2025 in order to be conservative and at peak in 2026 because of the catch-up of the previous year and the deliveries coming from the [ Plan B ], the public-private collaboration. This delivery calendar is intentionally more conservative than AEDAS' stand-alone plan, reflecting our disciplined execution approach. In addition to these figures, another 4,000 units are expected to be sold as land, as commented before, and contributing to our monetization strategy. Regarding the cumulative P&L of the figure, you can observe the EUR 5.1 billion GDV discussed that represents EUR 380,000 per unit, generating a EUR 1.3 billion gross margin, EUR 1 billion of contribution margin and a net income, as Jordi mentioned at the beginning, of EUR 450 million. As a conclusion of this section, we have in front of us an exceptional land portfolio in the top markets of Spain acquired at prices of 3, 4 years ago and with a conservative operational underwriting. And now I hand over the presentation back to Jordi.

Thank you, Mario. Over the next few slides, we will revisit the key 5-year objectives explained in our strategic plan that remember, it was presented in March 2023. Please note that all figures shown will reflect our position prior to the acquisition of AEDAS. Let's move to Slide 21. In this slide, we revisit one of the 2 strategic pillars, the shareholder remuneration. As you may remember, we initially committed to a remuneration of EUR 600 million at a time when our market capitalization was just EUR 700 million roughly. To date, we have paid EUR 325 million, which represents 60% of our 5-year objective. And at the same time, our market cap has grown to slightly over EUR 1 billion. This means that we have created value for our shareholders for a total of EUR 600 million plus already, EUR 300 million plus in dividends and EUR 300 million in share price appreciation. On the right-hand side of this slide, you can see the 3 key factors that have allowed us to make the distributions. First, we successfully sold our build-to-rent portfolio at attractive development margins of 25%, which has unlocked EUR 325 million in cash. Second, we reduced land acquisition using our own equity during the years 2023 and 2024. And third, we delivered strong margins in our core business operations. Finally, it's important to emphasize that we have achieved all this while maintaining a conservative loan-to-value ratio in the range of 20% and 30% as promised. In the next slide, you can see the second strategic pillar, our equity-efficient growth strategy. As you may remember, we initially set the target to raise and invest EUR 500 million in opportunities generating annual returns of over 20% for Neinor. As we have illustrated, that guidance was very conservative. In just 2 years, we have raised EUR 1.2 billion from a range of institutional investors. Of that, EUR 900 million have already been invested, which means almost 2x what we promised for a 5-year period. In the meantime, we also refinanced a few months ago our corporate debt through a bond issuance. This has allowed us to have strong cash position to afford this deal of AEDAS. And finally, we communicated to the capital markets that through the optimization of our balance sheet and equity-efficient earnings growth, we were targeting a return on equity of around 15% by 2027. With this said, follow me to the next slide, where you will see how the acquisition of AEDAS positions us to go faster and beyond the objective initially defined in our strategic plan. Let's begin with the shareholder remuneration in Slide 24. As previously mentioned, our original plan was to distribute EUR 600 million to shareholders by 2027. Following the transaction and the contribution from AEDAS, we are now increasing the target up to EUR 850 million. This represents an additional EUR 250 million, which is an increase of 44% in absolute terms and approximately 30% on DPS basis. Also represents that we plan to distribute EUR 500 million in the next 2 years. And if we look at the coming 5 years, Neinor has the capacity to distribute over EUR 1 billion of dividends, which demonstrates our focus on shareholders. Now let's move on to the next slide to look at the projected impact on net income and return on equity. This slide follows the same structure as the previous one. First, as shown in the red column, our original strategic plan projected EUR 360 million in net income between 2023 and 2027. Today, with the contribution from AEDAS, represented by the black columns, we now expect to exceed EUR 500 million in the same period. This implies an increase of 40% in absolute terms compared to the original plan and more than 25% on a per share basis. It is important to note that these projections do not include yet the potential impact of the PPA, which may temporarily increase the net income in 2025 and reduce it proportionally in subsequent years. Finally, thanks to all this, we are confident that not only we will meet our 15% return on equity, but we will increase it up to 20%. Let's take a look at the leverage in the following slide, #26. This slide shows the evolution of Neinor's loan-to-value ratio. As you can see, during the first 2 years of our strategic plan, we maintained a conservative loan-to-value well below the 23% range that we promised. Looking ahead, we expect Neinor's loan-to-value to remain in the range I have said, even considering the shareholder remuneration announced today. It's important to note that the debt associated with AEDAS is nonrecourse to Neinor and therefore, not included in these figures. However, for transparency, the black line of the chart illustrates what Neinor's LTV will look like if AEDAS debt was treated as recourse. In that scenario, the loan-to-value would exceed the 23% range, but this is fully aligned with what we have always communicated to the market that may be temporarily exceeding the range when closing strategic high-value opportunities like the one we are presenting today. Lastly, as you can see, from 2027 onwards, even when we include the nonrecourse debt, we expect the loan-to-value to be within the 20% to 30% range. Let's go to the last slide. This slide illustrates the impact of the transaction on capital markets perception and valuation of Neinor. On the left-hand side, you can see current Bloomberg consensus estimates, EUR 79 million in net income for 2026 and EUR 85 million for 2027. Following the transaction, we expect these figures to increase by approximately 65% and 88%, respectively. And this uplift is not limited to just those 2 years. AEDAS is projected to contribute an additional EUR 300 million in profits beyond 2027, further supporting long-term earnings growth. On the right-hand side, we illustrate the implicit price earnings post transaction. Taking into account these revised estimates, Neinor will be trading at 7.5x price earnings for 2026 and just 5x in 2027. This is half of the multiples in U.K. So as you can imagine, we see a lot of potential value embedded for our shareholders. And now I hand over the presentation back to Borja for the key takeaways.

Thank you, Jordi. Now let me bring this session to a close by stepping back and zooming out. Let's talk about the big picture. Spain is facing a structural housing crisis, a production deficit over 1 million homes today projected to increase up to 1.8 million by 2030, the equivalent of around 18 years of output. This isn't cyclical. This is structural, and Neinor is essential to help to solve this gap. With a high-quality land bank of 43,000 units fully entitled and ready to execute, we control the most important and ready-to-go residential pipeline in the country. In a market defined by scarcity, we own the best asset visibility. But it's more than scale. It's mission. We are building homes, yes. But we are also building economic resilience, social impact and a platform for institutional capital to deploy at scale into the most fundamentally sound resi market in Europe. This transaction is not just about growth. It's about leadership in profitability, in purpose and in performance. Neinor's journey over the past years tells a powerful and consistent story: execution, profitability and capital discipline across every phase of the cycle. Since 2017, we have delivered over 13,000 homes, generated more than EUR 4.5 billion in revenues and built one of the most efficient, scalable residential development models in the market. We have deployed more than EUR 3 billion with precision, delivering industry-leading margins without compromising return thresholds. Since 2023, we are scaling our asset management platform to tap into institutional capital at speed and scale. We have deployed close to EUR 1 billion in equity-efficient structures that drive enhanced returns and reduce risk for our shareholders. Over the next 5 years, this platform will allow us to deliver around 30,000 new homes, profitability predictably and with full control of our capital stack. This is the power of a platform built to outperform in a market across every cycle and with one goal: long-term compounding value creation. And with that, we conclude today's presentation of Neinor's voluntary takeover offer for AEDAS Homes. But let's be clear, this is not just an acquisition. This is a step change. We are operating in the right market at the right time. Spain's residential sector is backed strong -- by strong macro fundamentals. Supply is structurally short, demand is real, and the growth runway stretches well into the next decade. Neinor sits right at the center of this momentum. We are fully consolidated platform with a best-in-class track record. We have done this before, and we'll do it again with speed, discipline and zero disruption. This transaction allows us to derisk and accelerate our road map, pushing beyond the '23-'27 strategic plan and delivering superior returns ahead of schedule. It is highly accretive, financially sound and fully aligned with our commitment to shareholder value. And above all, this is a rare investment opportunity. We are unlocking deep value in Europe's fastest-growing and most stable residential market at a moment when access, scale and execution matter more than ever. This is how you build the scale. This is how you compound value, and this is how you create the best residential platform in Europe. Thank you very much, and now we can go to the Q&A.

[Operator Instructions] And your first question comes from the line of Ignacio Domínguez from JB Capital.

I have 2, if I may. Firstly, could you remind us on the cost and maturity of the senior secured notes? And my second question is about the AEDAS green bond refinancing. How much do you expect to earmark for the bond refinancing and if there are changing control clauses?

Okay. Regarding your first question, in the senior secured notes, it's basically 4 years maturity, 25% repayment on an annual basis, okay? And the cost is in our presentation, okay? Euribor plus 525 bps. So basically a cost that is slightly above 7%. Regarding your second question, yes, there is a change of control clause at the bond at AEDAS. So we have also the funds to repay this bond.

And your next question comes from the line of Fernando Abril-Martorell from Alantra.

Just a couple, please. So first, following this deal, what are your new land acquisition targets for '26 and '27? And how should we think about your strategy longer term? And second, on profits, profits will likely benefit from AEDAS' contribution until it is fully monetized by you said around 2030. So what is your run rate earnings ambition beyond that point, say, by 2030 or 2031?

Thank you. I take the first one regarding the land investment strategy. Well, with this transaction, we have derisked and accelerated our investment budget with very good returns of plus 20%. Given the increase in our fully owned land bank, we expect new land acquisitions to be reduced in the coming next 2, 3 years, where we should be acquiring EUR 50 million to EUR 100 million. In the future, we should be buying between EUR 150 million and EUR 250 million, including equity of the asset management business. But having said this, we will continue to be very disciplined as we have demonstrated until now and riding the cycles with all the expertise we are accumulating. And the second one, I think Jordi will answer.

Well, I mean, it's not easy question. I mean in the coming 5, 6 years, what we are saying is that with the data that we have provided today that we could be in a net income around EUR 150 million every year. Thinking beyond 2031, we don't have the crystal ball. It would depend on the opportunities that we will see in the moment. But for sure that with this opportunity and all that we have closed until now in terms of asset management business, we should be in a position to exceed the guidance that we had until now. Let's see the level. Probably it's not a question for today.

Thank you. There are currently no further phone questions. I will hand the call back for webcast questions.

Thank you, operator. I will go through some of the webcast questions that I'm ordering here right now. The first one is regarding the tender offer asking -- the question is why are we launching a tender offer at a discount. Jordi, you may take this one.

Okay. Okay. I'll take it. I mean we believe that the offer price represents a fair value for 100% of the shares of AEDAS and, from our point of view, represents a good value for its shareholders. I mean the testament of this is that the majority shareholder that basically has -- holds 79% of AEDAS has irrevocably agreed to sell the stake at this price.

Thank you, Jordi. I have here another question with regards to the management of -- the operational management of the company after the transaction. After -- especially after the deals done with Hábitat and now AEDAS, what is the limit in terms of operations that we can handle in this company?

Thank you, Jose. I'll take this one. Well, you think you never know the limit. But so far, what we are focusing is that we will be delivering between 6,000, 7,000 units per year in the following years. And really, it's something that we think that we can easily scale the capacity of the production of this company. Basically, we will keep the same structure that we have today, and that will be enough to allow the increase of rates very fast. In this case, especially, there are many drivers that will help a very fast integration of the companies. First, I must say that at the end, we are integrating 2 of the best-in-class companies in Spain, and that will make easy all the stuff about documentation, our procedures, our capacities. I also must say that both platforms are already producing, are already working. So if we zoom today what both companies are doing, they are already doing 6,000, 7,000 units per year. And we work basically in the same regions with the same control software with very similar strong procedures. So basically, all that we have to do is to integrate the teams. And to do that, we have designed an integration program that was similar to other integration programs that we have used in the past. So we are used to do this type of operations. And I can give some main ideas. First is that we will give priority to execution. Execution will be the first one. And the second, let me explain a little bit how we see the company. The company has a value chain that goes from land acquisition to project design, construction, commercialization and deliveries. And this is like the heart of the company. And surround this, we have other departments, the corporate departments, human resources, IT, legal, compliance, investor relationship and so on. So basically, all that we have to do is to put some more people in these departments. We will keep a very strong structure in the top management of the company. And basically, at the end, it's something similar as what we did, for instance, in Alovera that we went from 0 production to 1,000 or 1,500 houses per year. There, it was more difficult because we have to create a new structure. Right now, we have the structure. So all that we have to do is to integrate the teams. We have rates of how many architects are we going to require, how many lawyers, how many blah, blah, blah in each department. And it's something that we think that in a period of 6 months, more or less, both companies will be fully integrated. But meanwhile, we will keep the production of both companies between 6,000, 7,000 units per year.

Thank you, Borja. We have here some questions on the debt side, on the credit side. I'm going to group them. The first one for -- both of them actually for Jordi, but the first one is on the public ratings of the bonds post the transaction, if we expect any changes.

At Neinor Homes level, what they expect is a positive outlook, being honest because we are strengthening the company through this investment. And remember that the debt -- I mean, the senior secured notes at the target has no collateral. So it's ring-fenced. So positive in that sense. And regarding the target one, as I have said, in any case, there is a change of control clause, so it's going to be repaid.

And then the second question related with this is the debt from Apollo is amortizing at 25% per annum over the next 4 years. How do we look to pay this down?

I mean it's a senior secured notes. Other thing is that it's subscribed and underwritten by different funds from Apollo, okay? Second, we are based on our conservative underwriting that Mario has explained very well. We will generate enough cash to repay this 25% down payment on an annual basis. And not only this, we will generate extra cash that will be used to release the dividends that we have committed today.

Thank you, Jordi. So this concludes the questions from the webcast platform. Operator, I think we have another one from the phone line.

Your next question from the phone line comes from the line of Ignacio Romero from Banco de Sabadell.

I have a technical one on the capital increase on the EUR 225 million equity increase. Will this be a private placement for the main shareholders? Or will you issue rights so all shareholders may participate? And also related to this equity increase, is there a reference price for this?

Regarding your first question, the 3 main shareholders have underwritten the EUR 225 million. So we are fully funded. So it's not that we need money from third parties. Having said this, obviously, we will open, in principle, the door to all investors to participate. And regarding your second question, I mean...

Sorry, Jordi, just -- sorry to interrupt, Jordi. Just to be clear, so these main shareholders will only offer their capital if the equity increase is not subscribed by the rest of shareholders. I'm not sure I understood the...

Correct. That's it. And regarding the second question, we will see. It will depend on the market price.

Thank you. There are no further phone questions. I will hand the call back to you.

Thank you. So this concludes the session. We remain available to answer any questions you may have. Thanks a lot for joining, and we'll be in touch.