RPT-Spain divestments opportunities for private equity

(Repeats to change name of organisation in paragraph 2 to English language version)

By Sarah Morris

MADRID, April 5 (Reuters) - Spanish and other European private equity funds see opportunities this year from firms and savings banks selling non-core business and assets in Spain, said the head of a private equity association.

"Many large companies are having to sell divisions to concentrate on their core business," said Maite Ballester, chairman of the Spanish Private Equity Association (ASCRI) and head of private equity group 3i in Spain.

"There will be a lot of deals like that both by the builders as well as by savings banks that have non-listed industrial holdings."

Spanish companies and banks invested in a wide range of businesses during Spain's boom years when credit was cheap but many are now focusing on their best-performing business to strengthen their balance sheets.

Spanish builder ACS (ACS.MC), for instance, on Friday sold its stake in service unit Clece to private equity firms Luxpeak and Mercapital Private Equity for 608 million euros ($862.4 million).

Spain's unlisted regional savings banks, known as "cajas", are particularly under pressure to raise capital after the government demanded they increase reserves to tough new levels.

According to media reports, U.S. private equity groups Cerberus [CBS.UL] and Apax Partners have held talks with the cajas but foreign investors find the assets overvalued.

Unlike their U.S. peers, European private equity groups tend to have bans from holding stakes in the financial or property sectors, said Ballester, who saw limited attractiveness to the regional savings banks' assets.

"(Investing in the savings banks) is complicated," said Ballester. "Many of the assets are regional and don't fit our criteria. We are looking for companies that have a strong presence in their markets and that are looking to expand abroad."

The association expects this year to be a strong one for private equity-backed buyouts as specialising financing has returned to the market. So far this year, deals have totalled 3 billion euros. ($1=.7050 Euro) (Reporting by Sarah Morris; Editing by Jon Loades-Carter)