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Repsol will remain in treasury share of the shares owned by Sacyr

85% of banks will refinance half of the construction company’s credit, some 2.4 billion

Time is running out

Time is running out

Sacyr and Repsol had to hold extraordinary councils on Sunday because the situation is unsustainable. At the same time, Sacyr yesterday maintained a tough negotiation with the creditor bank to analyze in extremis all the options that are on the table. Apparently, the terms of the agreement will ensure that banks refinance half (2.446 million euros). The other half will be bought by Repsol, as treasury stock.

At least 85 percent of the banks that granted Sacyr the loan with which they bought 20% of Repsol are willing to refinance the construction company and extend its refund until 2015, according to sources close to the negotiation, Efe reports. That is, the vast majority of banks are in favor of refinancing the loan, although one part, which represents approximately 15 percent of the entities, wants to execute the guarantees and not finance the loan again. Among that 15 percent is an important foreign entity. It is almost certain that the Portuguese banking comes out of the union.

Anyway, the affected company, Repsol, is aware that it will have to come into play and take the reins to some extent, as the situation is unsustainable and the deadline to refinance is tomorrow, day 21.
In fact, both the board of the builder and the oil company talked about the formula that Repsol would keep with 10% in treasury for later, in a short and medium term, give the pass to another shareholder.

Both the directors of Sacyr and Repsol were summoned extraordinarily.

The possibility that takes more strength is for the oil company to keep a 10% package as treasury stock, equivalent to around 2,700 million at market prices. It would be a financial oxygen ball, but above all a mechanism to unblock the situation. In this sense, the oil company has already started a round of contacts to find potential buyers, both industrial and financial, who would enter their capital in a phase of less financial stress and with some type of discount.
However, Repsol will not act definitively until the creditor bank does not specify its position. Financial sources pointed out last night that it was about closing the agreement.

The possibilities of a creditors’ meeting or of the payment dation if the agreement is reached will be discarded. Sacyr is one of the five largest construction companies in the country and if it entered the contest, it would affect hundreds of suppliers throughout the country.

Another option that Sacyr was weighing, selling a package to a third party, is ruled out. The construction group tried to sell a package of between 8% and 10% with a premium of 4 euros to avoid handicaps. Sacyr bought at 26.7 euros on average and Repsol shares closed yesterday at 22.2 euros.

Logically, this route is unfeasible because any buyer interested in the shares would go to the market. In fact, negotiations with the Chinese group Sinopec were definitively broken last Saturday afternoon in the absence of agreement on the price.

The oil group presided by Antoni Brufau is waiting for the final solution, which should be announced today at the latest. He will hold his regular council of the month on Thursday to see how everything is.

In the face of such tension, the treasury stock package of the 10% environment would be taken with a 5% discount on the quotation. One of the essential conditions that Repsol places to act in this sense is that Sacyr breaks the parasocial pact with the Mexican group Pemex .

At the close of this edition, the meeting between the representatives of the creditor bank and the directors of Sacyr followed. And, therefore, the definitive solution to which they were going to arrive between the first shareholder of Repsol and the bank was still not public.

 Repsol buys Sacyr half of its stake in the oil company  Sacyr breaks with Pemex and Repsol buys 10% of the construction company

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