UPDATE 1-Spain's Bankia selling its 12.1 pct of IAG to raise cash

Wed Jun 26, 2013 2:30pm EDT

MADRID, June 26 (Reuters) - Spanish nationalized lender Bankia is selling its 12.1 percent stake in International Airlines Group , worth $906 million, under pressure to raise cash through corporate stake disposals.

Bankia's strategic plan following its state rescue last year targets 8 billion euros ($10.4 billion) from the sale of stakes in listed companies. The IAG holding is the first large stake to come under the hammer.

In a statement on Wednesday, Bankia said it will sell the IAG shares to institutional investors in a quick private deal led by Merrill Lynch and Bankia Bolsa.

Shares in IAG, which owns British Airways and loss-making Spanish airline Iberia, closed at 3.10 euros each in Madrid on Wednesday, valuing the stake at 697 million euros.

Bankia also owns 20 percent of tech firm Indra and 5.1 percent of utility Iberdrola, as well as big stakes in insurer Mapfre, hotelier NH Hoteles, olive oil firm Deoleo and property firms Metrovacesa and Realia.

The bank hired Rothschild earlier this year to look for buyers for the stakes.

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