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Villar Mir Sells Another 5% Stake In Colonial For €114M

10 June 2016 – Expansión

Grupo Villar Mir has sold off another 5% stake in Colonial for €114 million. Together with that stake, another 1.23% of the shares, which had been owned by the President of OHL and which are currently held by Société Général, have also been placed on the stock market.

Following this operation, the company owned by Juan Miguel Villar Mir has lost its status as the majority shareholder of Colonial; Qatar Investment Authority takes over that mantle, with its 13.13% stake.

It is the second time that Villar Mir has decided to sell shares in Colonial in less than a year, after it sold a stake representing 10% of the share capital, worth €178 million, in September last year.

Whilst that divestment was undertaken in order to finance OHL’s capital increase; this time around, the objective is to reduce the gearing ratio of Grupo Villar Mir, given the current climate of volatility on the stock markets, said sources close to the company yesterday. On the other hand, with this sale, the group will generate significant capital gains.

Willingness to continue as a shareholder

The same sources said that Grupo Villar Mir continues to be “very satisfied” with its shareholding in Colonial – it still has a great deal of confidence in the company’s future and does not expect to sell any more of its shares in the group in the coming months.

In May 2014, Villar Mir participated in Colonial’s capital increase, subscribing in full to the amount that corresponded to it on the basis of its shareholding in the company. In order to finance that operation, Grupo Villar Mir negotiated a financing contract with Deutsche Bank amounting to €300 million. The contract was divided into two tranches. The first, amounting to €100 million, had to be repaid within a period of less than a year, whilst the second, amounting to €200 million has to be repaid within a period of five years.

Last September, Villar Mir also sold a 2.9% stake in Abertis, which, like in the case of this sale of its shares in Colonial, it justified by the need to finance OHL’s capital increase. The businessman’s stake in Abertis was reduced to 16%.

The Catalan real estate company Colonial earned €11 million during the three months to March 2016, which represents a 131% increase compared to the same period last year, when its profits amounted to €5 million. Last May, Colonial announced that it was going to carry out a non-monetary capital increase, amounting to €265 million, so as to continue to acquire office buildings. In parallel to this operation, the group is preparing to make investments worth €400 million. Colonial’s shares closed trading yesterday at €0.709 per share, having increased by 1.14%.

Original story: Expansión (by M. Anglés and C. Morán)

Translation: Carmel Drake