Guggenheim May Join Soros in FCC Capital Hike

24/11/2014 – Expansion

The €1 billion capital hike approved by the shareholders of FCC brings another surprise. Investment fund Guggenheim Partners could join financial magnate George Soros who was bound to subscribe to all increase shares corresponding to Esther Koplowitz (pictured) and take a 25% stake in the contractor. The businesswoman will reduce her holding to a similar percentage as now she owns 50.02% through B-1998.

Final shareholding structure of Fomento de Construcciones y Contratas will depend on the result of negotiations between Soros and Koplowitz teams. Still, the due diligence (or asset valuation) process is pending accomplishment.

It is expected that the final price will be slashed by 25-30% and that may attract some new investors. For instance, Guggenheim could obtain a 5% share.

For the first time, George Soros rescued FCC in December 2013, when the businessman bought a 3% share in the group for €55 million (15 Euros a share).

The current operation is said to be worth €700 million, of which €500 million corresponds to new shares acquisition and the rest to the value of the pre-emptive right of B-1998.

Esther Koplowitz foresees spending the equity on amortization of the €1 billion debt owed to BBVA and Bankia, which the banks prolonged by another 5 years at an Euribor + 250 bps interest rate.

FCC will intend most of the capital hike funds for repayment of the B tranche valued at nearly €4.53 billion. Originally amounting to €1.35 billion, the part grew by another €1.39 billion in interests which step-by-step went on growing annually from 11% to the present 16%. The agreement also involves a 15% write-off on the part of banks.


Original article: Expansión (by B. Badía & C. Morán)

Translation: AURA REE