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Soros Becomes Strategic Partner of FCC

18/11/2014 – Cinco Dias

U.S. investor George Soros will become the strategic partner of Esther Koplowitz (both pictured) in FCC through a €1 billion capital increase agreement. Thereby, Soros will take on the entire increase amount corresponding to the businesswoman.

George Soros, currently holding a 3.8% share in FCC, will underwrite to 25%. The investor will inject €650 million and buy the pre-emptive subscription right. The price of the new shares has not been disclosed yet.

The contract is said to have been signed for a 4-year term and it implies ratification of the present managing board of the company.

FCC has come to agreements with 75% of its banking lenders, hoping to do the same with the rest. As the firm’s CEO Juan Bejar explained, the talks concern amortization of its €900 million debt and a 15% forgiveness.

Debt Amortization

The builder controlled by Esther Koplowitz will thereby liquidate a €1.39 billion tranche of the amount owned by the group. It currently pays an 11% interest rate bound to rise to 16%.

This way, in case of non-payment, the liabilities will upsurge to nearly €2.26 billion by 2018, and if FCC fails to pay it off again, the banks will seize its shares.

Therefore, the firm is going to intend the €1 billion increase for amortization of 21% of the total debt.

Specifically, €765 million will be destined for liquidating €900 million of this tranche thanks to this 15% release permitted by banks.

Furthermore, €100 million will be received by Cementos Portland, €100 million by FCC Environment and €35 million will be consumed by the transaction costs.

 

Original article: Cinco Días

Translation: AURA REE