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FCC shareholders approve a One-billion-euro capital increase

19/11/2014

FCC shareholders approve a One-billion-euro capital increase

  • Esther Alcocer Koplowitz highlights the "forward-looking contributions" of the key shareholder in the proposed solution
  • Juan Béjar confirms that the process of change makes the company "an attractive prospect for investors"

 

FCC shareholders approve a One-billion-euro capital increase

FCC shareholders have approved the proposal for a capital increase of 1 billion euro at an Extraordinary General Meeting held this afternoon in Barcelona. The purpose of the increase is to strengthen capital, reduce debt and improve results for the Group.

In her presentation to shareholders, the Chairman of FCC, Esther Alcocer Koplowitz, said that "our strategic objective is to create value for shareholders, whilst addressing the challenge of making the Group more profitable, robust and efficient". Esther Alcocer Koplowitz also highlighted the role played by the key shareholder "as essential to the creation of the solution proposed through the capital increase" and she thanked her for her "forward-looking contributions".

The Vice-Chairman and CEO of FCC, Juan Béjar, confirmed that the capital increase makes the Group "an attractive business prospect for national and international investors". He went on to describe FCC Group as “restructured, with a solid portfolio and positive growth outlook, focused on high-value business, with a management team dedicated to results and to all shareholders“. He described the process of change as one that “places great value on the history of the Group, with an attractive share price".

With the funds obtained through the capital increase, FCC will pay off 1.39 billion euros of the Tranche B of debt, which accrues a rising interest rate of 11% to 16% and is convertible into shares after a period of five years, if it is not paid or refinanced (Payment in Kind or PIK).

Specifically, FCC plans to allocate 765 million euro from the capital increase to the amortisation of this tranche, which will settle 900 million euro of this loan after applying the 15% write-off already agreed with the main creditors. The rest of the funds raised will be allocated to Cementos Portland Valderrivas (100 million euro) and FCC Environment (100 million euro). The remaining 35 million euro will be allocated to operating expenses.

The interest rate on the remaining 490 million euro of Tranche B (450 million euro of principal debt plus 40 million euro of capitalised interest) will be reduced from an average of 13.5% to 5%, resulting in a 160 million euro reduction in interest.

The sum of the profits arising from application of the funds equates to a 2.3 euro creation of value per share.

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