Sacyr Seeks Investors To Inject €300m Into Testa

4 February 2015 – Expansión

Operation Accordion / The construction company will receive contributions from its subsidiary amounting to €1,180 million, as the preliminary step in the placement of up to 30% of its capital with institutional investors.

Yesterday, in a whirlwind shareholders meeting, Sacyr gave the go ahead for Testa, its real estate management company, to carry out a significant internal restructuring with the dual-objective of enabling it to pay multi-million debts to its parent and at the same time, strengthening its balance sheet from the inflow of funds through a capital increase on the stock market.

Specifically, Testa’s shareholders renewed the mandate to the Board of Directors (led by Fernando Lacadena, the new CEO, who replaced Daniel Loureda) to conduct an operation to return €1,197 million to its shareholders through an extraordinary dividend payment of €527 million and a reduction in capital of €669 million, within the next year.

Sacyr will be the main beneficiary since it controls 99.3% of Testa’s share capital. This operation is subject to a simultaneous capital increase, to allow Testa to reconstruct its balance sheet through an IPO, which has a minimum target of €300 million.


The two operations are closely linked, which is why Sacyr has taken its time to sound out the market and determine the level of investor interest in Testa. The intention of the group, chaired by Manuel Manrique, is to carry out a placement through an IPO aimed at institutional investors. In parallel, Sacyr also plans to divest some of its stake, although how much it will relinquish has still to be determined. In any case, the construction company wants to retain its role as the controlling shareholder, and so its stake after the sale will not fall below 70%.


Testa’s shares closed trading yesterday at €19.30 per share, after a strong rise of 7.3%. The company’s market capitalisation amounts to €2,230 million, which means that at current market prices, the sale of a 25% stake would generate income of €550 million.

In a second phase, Sacyr’s objective is to convert Testa into a Socimi (a real estate company that pays out 85% of its profits in dividends). This new type of company, which benefits from significant tax exemptions, has attracted interest from reputed investors such as George Soros, John Paulson and large funds, including Pimco.

For Testa, the new Socimi structure would have the advantage of starting out with a large, ready-made portfolio of assets, which generated turnover of more than €140 million during the first nine months of 2014.

According to the latest appraisal data published by the CNMV, the market value of Testa’s properties amounts to €3,287 million, which would make it the largest Socimi in the country by asset value. Currently, Merlin Properties is the largest Socimi, with assets valued at more than €1,276 million.

This year, we also expect to see the IPO of Bulwin, the Socimi created by the listed company Quabit. The historical real estate company GMP has also changed its structure to a Socimi.

Original story: Expansión (by C. Morán and R. Ruíz)

Translation: Carmel Drake