FCC’s Refinancing Backed by 85% of Creditors

16/12/2014 – Expansion

FCC is going to close two key issues this week: the capital increase of 1 billion euros and the agreement with banks to refinance a loan of 1.39 billion euros through a partial amortization of 900 million. The placed percentage will become known on Thursday. Also, on that day the creditors will decide upon the B-tranche of 1.39 billion due in 2018, having an average cost of 13%.

According to sources with knowledge on the matter, 85% of FCC’s lenders are in favor of a 15% forgiveness on the liabilities and a 5% cut in incurred costs. Commercial banks have accepted the conditions but still the opinion of investment funds which bough some debt on the secondary market remains unknown.

FCC believes the final adhesion may reach 90%, allowing it to obtain legal approval and oblige the rest of the lenders to say ‘yes’ to the operation. However, if any of the creditors refuses, the builder is going to amortize smaller amount of money, namely 873 million euros.

Legal Alternatives

According to sources, some of the hedge funds which acquired the distressed debt of FCC are seeking legal paths to block the agreement. With such a goal in mind, they have hired law offices like Boies Schiller.

The last to sell its debt share on the secondary market was BNP Paribas, having a total exposure of 177 million euros, of which 53 million corresponded to the B-tranche. Apart from the funds, also Goldman Sachs owns a 40 million share in this part and RBS was among the first to sell its 70 million volume (21 million included in the B-tranche). According to estimations of Kepler Cheuvreux, between 15% and 20% is in hands of investors who acquired the distressed loans from their original holders.

When it comes to the capital hike, yesterday Mexican billionaire Carlos Slim sealed the purchase of 66.7 million new shares of FCC for 650 million euros, by the deed becoming the majority shareholder with a 25.6 % stake.

Slim, through his company Control Empresarial de Capitales (CEC), has subscribed to the new shares corresponding to pre-emptive right shares of Esther Koplowitz (pictured), who will now hold 22.4%. Yesterday on the stock market FCC closed at a price of 11.1 euros a share, up 0.6%.


Original story: Expansión (by C. Morán & C. Badía)

Translation: AURA REE