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Simple dialogue between bank and entrepreneur
Elena Barberis, along with her brothers Paolo and Luca, has taken the helm of the company previously run by her father, the architect Franco Barberis, who passed away in 2020. He was already the third generation to run this family firm, founded by Battista, a master builder who set up his own business in the late 19th century. In Elena's words: "We have a long history and during this time our company has been able to deal with many crises. However, after 2008, banks changed, adopting this pre-determined, total closure towards the real estate and construction industries... Things went from one excess to another, as in the past building projects were financed above market value, leading to a bubble, and then the taps were turned off completely."
The Barberis siblings fought "tooth and nail" to sustain the company, even covering losses and putting their own personal assets at risk. "We have always put all our energy into this company," explained Elena, quietly but firmly, "with commitment and passion. And through this we managed to keep afloat until 2019, with total sales ranging between 15 and 20 million a year, combining real estate transactions and contract work."
Franco Barberis S.p.A. is the story of an investment by a construction company from Alba that ended up in hell - mired in Non Performing Loans - before being reborn to find new success.
It was truly an amazing journey through "down and out", a journey that is more like a fairy tale or a miracle, because we exist in a system that makes no distinction between companies that have no hope and those that still have value, even though they are going through troubled times. This means opportunities might be lost to sustain excellence that can easily be regained with a touch of belief. "In essence, the last decade has been the most trying for our company," explained Elena Barberis, using that wonderful sense of understatement found in Piedmont.
Think about the ugly duckling. Think about the funny little bird that amazes its mother by turning into a marvellous swan. People who love such fairy tales will struggle to believe that in the complex and - let's be honest - arid world of finance and loans such a story could be repeated.
The pandemic brought a black swan. "We were already in a debt restructuring process with banks and it seemed to be moving along, due to be completed by the end of 2020. But Covid brought everything to a standstill. Then, during the first lockdown as I was racking my brain as to how we might get out of this deadlock, I decided to contact illimity Bank. I'd been keeping an eye on the company for a while, because I saw it as an innovative bank compared to the traditional model. I asked for an appointment and got one straight away, digitally of course. They started looking into our situation and especially one of our projects, perhaps our flagship project, in Albenga." This flagship was allowed to set sail and is now producing new gains, despite having lost all favourable winds when Covid broke out in March 2020. "It was an innovative, interesting project, with new technical characteristics. In the middle of construction. With the building site frozen because of the pandemic and the stop on credit," said Elena. And so things remained unmoving until one day "we learnt that the bank which held the loan and which had continued to fund us till then, had put a portfolio of UTPs on the market, and that our loans were in that portfolio, despite the fact we'd always honoured our commitments. Disconcerted, we realised we were a Non-Performing-Loan."
But what did illimity see as special, in this ugly duckling from Albenga, that it made it willing to sustain its development? Above all, the credibility of the company as a transparent and profoundly serious business - with a highly demanding code of ethics, to put it mildly - and a stable industrial track record. Then, there was also the technical quality of the project, built on notions of sustainability and urban regeneration. "The project originated in 2011," noted Elena. "And it took a long time to come to fruition precisely because of how innovative it was. This was never a traditional building project. The site was an area that had developed around a warehouse owned by a fruit and vegetable cooperative, a disorderly, low-quality site that had been progressively swallowed by urban expansion. We wanted to regenerate this land, focusing on the entire zone, and taking into account both the roadways and the skyline and services. The new district - 13 thousand metres of surface area with significant building volumes - has been included in the Recovery and Resilience Plan among the works to be completed by 2026, and shifting the railway line towards the hinterland, made possible by European funds, will bring substantial additional benefit to the area. The municipality is a cycle path and communal areas on the old site, thus helping to regenerate the whole area. Our district will be located in the heart of an area with public gardens and local services conceived by Gonzalo Byrne, a Portuguese architect, many years ago. The first project for that area was two tower blocks... Now, well... let others judge!"
This was the turning point - noted Elena Barberis - that is, when illimity, in November 2020, bought the Vistamare loan - as our company in Albenga is called - and we entered into a new agreement with them and they renewed our funding at better conditions so that we could terminate the work in the briefest time possible. Basically, they believed in us!
This transaction clearly made a major difference at the building site, where work is nearly complete. In these weeks, we are finalising the last few jobs, but we have already sold half of the apartments. We also recently received an answer from the Italian Revenue Service about the applicability of the Sismabonus for this project."
So, an ugly duckling has become a swan. A building site that was stuck because of an old-style loan was able to get back on track due to innovative credit. But what does Elena Barberis put this successful metamorphosis down to? "It's simple. Traditional banks no longer examine the worth of individual transactions. They press a button for financial parameters and see what comes out. If a red warning pops up, that's the end of it. Even they admit as much. New banks are different. They are going back to the old ways and looking at things on merit. Plus, following the Albenga transaction, illimity has expanded its cooperation with us to various other companies and current transactions, and it is purchasing other loans. Moreover, as we now have a portfolio of an impressive sixty million in work simply from the 110% government bonus scheme, we can truly say the loan transaction is valid."
