Carlos Slim On Verge Of FCC Takeover

13 January 2016 – Expansión

The conditions that Esther Koplowitz and Carlos Slim, the majority shareholders of FCC, agreed on 27 November 2014, to facilitate a €1,000 million capital increase and the refinancing of the business woman’s personal debt, may now become an obstacle that stands in the way of allowing the Mexican investor to guarantee the construction company’s latest capital increase, amounting to €709 million.

Slim has committed to subscribing for all of the new shares (totalling €118.2 million at €6 per share) that are not placed during the preferential subscription period. This guarantee exposes him to the possibility of exceeding the threshold of holding a 30% stake in FCC, which would force him to launch a takeover for 100% of the company.

However, the terms of the shareholder agreement signed with Koplowitz in 2014 prohibits the Mexican investor from exceeding the 30% threshold until the end of 2018. The agreement, which was submitted to the CNMV on 27 November 2014, clearly states that, “the parties agree to not increase their individual stakes in FCC above 29.99% of the share capital (that carry voting rights) for the duration of the lock-up period (four years)”.

Sources close to the company say that the most likely course of action is that both shareholders will agree to modify the shareholders’ agreement to lift or ease the limits to allow an increase in their (permitted) stakes, above all, given that, in less than a month, Slim has increased his shareholding from 25.6% to 27.2%. “He is marking the field of play and launching a clear message to the market ahead of the upcoming capital increase”, say the sources.

Slim is already exposed to an identical situation in Realia, in which he now holds a stake of more than 30% following a €89 million capital increase. He is currently waiting for the CNMV to release him of the obligation to launch a takeover.

Even if the waiver for Realia is accepted by the CNMV, it would not apply in the case of FCC, given that Slim is the majority shareholder and none of the other shareholders in the company have a stake of more than 30%. At market prices, the formulation of a takeover of 100% of FCC may cost Slim around €850 million, if he exceeds the threshold of 30% (excluding the 22.4% stake held by the Kolpowitz family).

Yesterday, trading on the stock exchange closed with a share price of €6.89 for FCC, i.e. 15% above the price set for the capital increase (€6/share). FCC’s €709 million capital increase is the latest measure adopted by Slim to complete the restructuring of his stake. The construction company wants to use the funds to repay some tranche B debt amounting to €450 million. It pays interest of 5% on the loan and it determines the group’s investment policy and shareholder remuneration.

In exchange for this repayment, the creditors must agree to commit to applying a discount of at least 15%. This is the same discount that was applied to the previous restructuring in which FCC refinanced debt worth €4,512 million.

Original story: Expansión (by C.Morán)

Translation: Carmel Drake

Sareb Will Issue €10,189m In Senior Notes On 9 Feb

30 January 2015 – Expansión

On 9 February, the Asset Management Company for Bank Restructurings (Sareb) will issue two sets of senior bonds amounting to €10,188.8 million in total, according to the Official Bulletin of the Commercial Registry (BORME) published today.

In its first appeal to the market this year, Sareb will make two issues, one amounting to €4,084.7 million and the other amounting to €6,104.1 million.

In both cases, the nominal value of the bonds will be €100,000 each and the interest rate will be three-month Euribor plus a spread.

The subscription period, for both issues, will run from 12:00 until 14:00 on 13 February and will terminate on 28 February.

Original story: Expansión

Translation: Carmel Drake