U.S. billionaire George Soros will become a key shareholder in Spanish building and services company FCC (FCC.MC) following a 1 billion euro ($1.25 billion) rights issue aimed at paying down debt, a source with knowledge of the matter said on Friday.
Soros, one of the world's richest men, will own around 25 percent of FCC's capital after reaching a deal with the company's major shareholder Esther Koplowitz to buy all of her rights to acquire shares in the capital hike, the source said.
As a result, Koplowitz will see her share of the capital reduced to around 25 percent from just above 50 percent now.
"A binding contract with George Soros was signed this morning by which the businessman commits to buy all the rights associated with (Koplowitz's investment vehicle) B-1998," the source said. FCC shares rose 8.4 percent on the news.
Chief Executive Officer Juan Bejar confirmed in a conference call with analysts that Soros, one of the world's richest men, had been in exclusive talks with Koplowitz, daughter of the founder of the company which helped rebuild Spain after the 1936-1939 Civil War.
Soros has committed to keep the shares for at least four years and will sit on the board of the heavily indebted company and have a say on strategy, the source said.
Depending on the price Soros will pay for the rights, his total investment will be between 650 million euros and 700 million euros, the source added.
Sources close to FCC said Soros already owned 3.8 percent of the firm's capital, which he bought late last year, weeks after Microsoft founder Bill Gates bought a 5.7 percent stake.
DEBT REFINANCING
FCC, which has sold assets and laid off staff to focus on core activities and shrink a debt pile built up during Spain's construction boom, on Friday booked a 788 million euro loss for the nine months to end-September.
The loss was mostly the consequence of a 769-million-euro writedown on assets, including on its UK waste disposal business, taken by FCC to clean up its balance sheet ahead of the rights issue.
FCC said financing costs rose 12 percent during the nine-month period as they included punitive terms on a multi-billion euro debt refinancing completed in April.
The company said these costs would be reduced once part of its debt was paid off by funds raised in the rights issue.
Bejar said FCC had reached a deal with more than 75 percent of creditor banks to pay back debt worth 900 million euros with a 15 percent haircut.
He added that as part of the deal banks had agreed to allow FCC to restart dividend payments if it met debt reduction and core earnings targets.
