MADRID - Spanish property developer Reyal Urbis on Tuesday announced it was filing for insolvency after failing to negotiate a settlement over its debts with its creditors.

With debts of 3.6 billion euros (4.8 billion U.S. dollars), this is the second biggest insolvency case in Spanish history, following that of Martinsa Fadesa, another construction company, which went bankrupt with debts of 7.1 billion euros in 2008.

The construction company, whose shares have been suspended in the IBEX-35 stock market in Madrid, has debts with several creditors, among which stands out one of 530 million euros with Banco Santander.

The property developer owes another 300 million euros to Interval and 707 million euros to the Spanish "bad bank" (Sareb), which took toxic assets from other Spanish banks as part of the restructuring process to allow the refinancing of the Spanish banking system by the European Union.

Reyal Urbis' controlling shareholder and president Rafael Santamaria said the economic crisis in Spain and the weak situation of the real estate sector made it difficult for creditors and the company to reach an agreement.

He explained his company had tried to cut spending but falling income as a result of weak housing sales and rents had resulted in losses of 257.93 million euros until September 2012.

Reyal Urbis was founded in 2006. It has a total of 420 workers and a portfolio of 780 homes. (1 euro = 1.33 U.S. dollars)