Mexican billionaire Slim to take top stake in Spanish builder FCC

By Reuters

Nov 27, 2014 09:06 AM EST

Mexican billionaire Carlos Slim is set to become the largest investor in Spanish builder FCC after reaching a deal with the firm's current top shareholder Esther Koplowitz to buy her rights to participate in a $1.3 billion capital increase.

The deal means Koplowitz will lose control over the building group she inherited from her father, a German immigrant who built a construction empire during the years following Spain's 1936-1939 Civil War.

Slim's conglomerate Grupo Carso already holds small stakes in Spanish companies. But the roughly 700 million euro ($873.7 million) investment in FCC, once one of Spain's largest employers, is his largest and highest profile move in the country.

In a statement to Spain's stock market regulator on Thursday, FCC said Slim's Inmobiliaria Carso would hold a 25.63 percent stake in the company following the capital increase. Koplowitz will see her stake reduced to 22.43 percent, from just above 50 percent now.

Both shareholders have also agreed not to sell 85 percent of their shares for a minimum of 4 years, and they will each appoint four members to FCC's 12-strong board.

Slim said in a statement his firm would invest a total of between 650 million and 700 million euros -- with 150 million euros paid to Koplowitz for the rights to subscribe to the offer, and the rest to buy the new shares.

The builder and services company is offering 43 new shares for every 41 held, at a price of 7.5 euros each -- a steep discount to their current price of closer to 15.83 euros at around 1200 GMT.

Yet shares in the firm jumped 5.3 percent after their trading resumed on Thursday following an earlier suspension, as investors expressed relief the indebted firm would stay afloat.

FCC has sold assets and laid off staff to focus on core activities and shrink a debt pile built up during Spain's construction boom. Last week it approved a 1 billion euro rights issue to help it pay down high-interest debt and cut costs.

FCC said it would use 765 million euros of the funds to repay part of a 1.4-billion-euro syndicated loan with high interest rates. The rest of the funds will be used to pay debt at its units Cementos Portland Valderrivas and FCC Environment.

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