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FCC's Board of Directors launches the capital increase for EUR 1 billion

26/11/2014

FCC's Board of Directors launches the capital increase for EUR 1 billion

  • The decision was reached after Esther Koplowitz came to an agreement with Control Empresarial de Capitales, belonging to the Slim family, regarding their subscription rights
  • The new shares can be subscribed at a price of EUR 7.5 per share

 

FCC's Board of Directors launches the capital increase for EUR 1 billion

At a meeting held today, FCC's Board of Directors passed the implementation of the capital increase, for a total of EUR 1 billion, equal to 133,269,083 new shares, with a subscription price of EUR 7.5 per share.
 
The pre-emptive subscription rights to which current shareholders are entitled will start to take effect once the Spanish National Securities Market Commission (Comisión Nacional del Mercado de Valores, CNMV) has approved the documents relating to the issue. The subscription ratio is 1.048; that is, 41 current shares entitle the holder to subscribe 43 new shares. The operation is underwritten by Banco Santander, JP Morgan and Morgan Stanley.
 
Approval by the Group's top governing body took place after B 1998, the company through which Esther Koplowitz holds 50.02% of FCC, announced a deal with Control Empresarial de Capitales SA de CV, belonging to the family of Mexican entrepreneur, Carlos Slim, involving the sale of their subscription rights in the said capital increase, equal to half.
 
The capital increase represents the culmination of the Group's financial and operational stabilisation process and the start of a new phase focusing on operational profitability and renewed growth, particularly for the Environment and Water businesses. With the funds attained through the capital increase, FCC will bolster its equity situation, reduce its debt and improve its results by substantially reducing its financial burdens.
 
These funds will make it possible to pay off part of what is known as Tranche B of the refinancing agreement in effect since 23 June.  This tranche comes to a total of EUR 1.39 billion, accrues interest at a rising rate (from 11% to 16%) and is convertible in shares after a period of four years if it has not been paid off or refinanced.
 
Specifically, FCC plans to allocate EUR 765 million to the repayment of this tranche, which will settle 900 million after applying the 15% write-off already agreed with the main creditors.  The remaining funds will be allocated to Cementos Portland Valderrivas (EUR 100 million), FCC Environment (EUR 100 million) and expenses incurred in the issue process.
 
The interest rate on the remaining EUR 490 million of Tranche B (450 million in principal plus 40 million of capitalised interest) will be reduced from an average of 13.5% to 5%, resulting in a reduction of EUR 160 million in interest.  The sum of the profits arising from application of the funds and the restructuring of Tranche B equates to a creation of value of EUR 2.3 per share.