Colonial, one of Spain’s largest property groups, said on Monday it had agreed to a refinancing deal in a bid to keep the company from administration.

The reorganisation involves around €7bn of debt and is the biggest so far in the Spanish property sector, which has been battered by oversupply and the global credit crunch. It follows the collapse in July of Martinsa Fadesa, another big Spanish developer, which filed for creditor protection owing €5bn.