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Last updated: December 1, 2008 8:20 pm
Spain’s Sacyr Vallehermoso, the troubled construction group, on Monday agreed a €7.9bn deal to sell its toll road business, Itínere, to Citi Infrastructure Investors, a fund run by Citigroup, but questions remain over the Spanish group’s debt burden.
Once completed, the sale of Itínere would allow Sacyr to cut total group debt to €12.5bn, from about €18.5bn now, according to the company. Cash proceeds from the deal would probably be used to cancel some of the €2.1bn debt falling due next year, say analysts.
But Ana de Pro, managing director of Sacyr, said on Monday the company was “still negotiating” the sale of its 20 per cent stake in Repsol, the Spanish oil group. Early speculation had been that the sale of Itínere would relieve this pressure.
Lukoil, the Russian oil company, is among the leading candidates to buy the shares as part of the purchase of up to 29.9 per cent. There are fears that a sale to Lukoil, or another suitor, could lead to a full takeover bid for Spain’s only integrated oil and gas group, prompting debate in Spain about foreign ownership of energy companies.
Citi has offered €3.96 a share for an initial 51.7 per cent of the company, which also runs three hospitals, an airport and a transport hub. In a side deal, it will sell on its stakes in five motorway concessions in Spain and Chile to Abertis, the Barcelona-based infrastructure group, for €621m. It has also agreed to divest assets in Chile, Brazil and Portugal to Atlantia, the Italian infrastructure group formally known as Autostrade.
The deal, which follows months of negotiations, values the business at about €7.9bn, including €5bn in debt. The €2.9bn equity component compares with an implied €3.5bn price tag when Sacyr tried to float part of Itínere in April this year.
The Repsol stake is worth about €3.5bn, compared with the €6.5bn Sacyr paid for it two years ago, when its own market value peaked at €16bn, compared with €2.3bn on Monday. The Repsol shares were used as collateral against an original €5.2bn bank credit taken out to buy the stake.
Stock market turbulence since September has forced Sacyr to pledge another asset – rental property business Testa – to lenders to avoid breaching loan covenants. Sacyr will have to pledge further collateral after December 28 if Repsol’s shares trade below €14 for three consecutive days. They closed 6 per cent lower on Monday at €14.30.
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