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Villar Mir Sells 7.3% Of OHL To A Monaco Fund

13 October 2015 – Expansión

Three days after launching a €1,000 million capital increase for OHL, the Villar Mir group has transferred some of its subscription rights to enable it to meet its commitment to invest in the operation and still retain a stake of more than 50%.

Specifically, the family holding company has sold 10.89 million rights to the investment fund Tyrus Capital, which is equivalent to the acquisition of 21.78 million new shares in the construction company, i.e. approximately 7.3% of the group’s capital. Villar Mir did not reveal the revenues received from the transaction yesterday, but at the listed price of the rights last Friday (€5.60), the businessman would have obtained around €61 million, which he will use to cover his part of the subsidiary’s capital increase.

Tyrus Capital is a hedge fund based on Monaco, founded by the Lebanese banker Tony Chandraoi. The firm specialises in event-driven transactions (i.e. those resulting from extraordinary movements that alter the value of assets) such as, for example, OHL’s capital restructuring process. In the statement issued to the CNMV yesterday, OHL said that Tyrus Capital plans to subscribe to the capital increase for purely financial reasons and has not asked to take a seat on the Board of Directors of the construction company, despite the fact that it is now a significant shareholder.

Both Villar Mir and Tyrus Capital have been given preferential purchase and sale options lasting 18 months following the start of trading of the new shares in the company, in the case that certain events happen.

Extraordinary funds

To finance the expansion (around €400 million), Villar Mir has been forced to sell a significant part of the industrial group’s most liquid assets. In September, the holding company sold a 10% stake in Colonial and a 2.6% stake in Abertis. Yesterday, it announced the sale of 10.89 million rights in OHL (it still retains 458,415 rights, which give it the right to 916,830 new shares in OHL, i.e. 0.3%) and it is likely to also participate in the takeover of 6.5% of Abertis, whose acceptance period expires on 20 October.

“We have assets worth more than €7,000 million to fulfil our commitment”, said Juan Miguel Villar Mir (pictured above) a month ago as proof of his group’s financial solvency. Nevertheless, the businessman acknowledged in the capital increase brochure that the majority of the shares in Colonial, Abertis and OHL have been pledged and so, in theory, the availability of the funds, generated by the divestments made, is limited.

With the participation of Tyrus, OHL has now secured 57% of its capital increase and interest in the company seems to be growing in light of the listing of the rights and the shares. Yesterday, OHL’s rights were trading at €6, an increase of 7.6% since Friday. On the other hand, the group’s shares closed up 1.8% yesterday, at €8.20 per share.

OHL wants to use the €1,000 million it will raise to substantially reduce its debt. It plans to use around €600 million to repay its loans and the remainder to finance new highway concessions it has been granted in Latin America.

Original story: Expansión (by C. Morán)

Translation: Carmel Drake

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