George Soros buys stake in Spanish construction group FCC
By Miles Johnson in Madrid
George Soros has bought a stake in Spain’s FCC, becoming the second prominent international investor after Microsoft co-founder Bill Gates to bet on the indebted construction company in less than three months.
Funds associated with Mr Soros, the hedge fund philanthropist famed for making billions through currency speculation, bought a 3.1 per cent stake in FCC from the company’s biggest shareholder and philanthropist Esther Koplowitz last week, several people familiar with the deal said.
Ms Koplowitz, one of Spain’s wealthiest women, sold a 3.8 per cent stake in the company worth €72m through the Spanish broker Fidentis last month while retaining just over 50 per cent of its shares, FCC said in a stock market filing. The company declined to comment on the identity of the buyer.
Normally any investment in a Spanish company worth more than 3 per cent of its available share capital must be declared, but the Soros investment in FCC was made in part through derivatives, meaning a declaration could be avoided.
The collapse of Spain’s decade-long property boom forced some of its largest construction groups close to insolvency after years of aggressive debt-fuelled expansion. In recent months, however, as the Spanish economy has shown signs of stabilising, investors have begun to identify such companies as plays on the country’s recovery.
Funds associated with Bill Gates took a 6 per cent stake in FCC in October worth €113.5m at the time, prompting a surge in the company’s share price as the market interpreted the move as a sign of rising confidence in the Spanish economy.
FCC’s share price has risen 125.4 per cent in the past six months as it has taken steps to tackle its large debts by selling assets and increasingly focusing its business outside of its home market. FCC is aiming to sell €2.2bn of non-core assets as part of a drive to reduce net borrowings of €6.5bn, as of November of this year.
The investments in FCC have coincided with a return of international capital into Spain after fears of a possible European bailout during the height of last years’ debt crisis have faded.
As the government’s borrowing costs have fallen, Spanish shares have risen sharply, with the Ibex 35 index of the country’s leading companies up 15 per cent last year, and private equity groups buying assets in the nation.
Juan Béjar Ochoa, vice-chairman and chief executive of FCC, said the company’s recent successful refinancing of the debt of its UK subsidiary showed that international lenders were confident of its ability to restructure its business.