MADRID Spain will probably begin the privatization of bailed-out Bankia (BKIA.MC) with the sale of a 5 to 10 percent stake to institutional investors, the bank's Chairman Jose Ignacio Goirigolzarri said in an interview published on Sunday.
The sale of the bank, in which the government holds a 68.4 percent stake through its restructuring fund FROB, will be carried out in phases over the next few years, Goirigolzarri told newspaper ABC.
"The most likely privatization process is similar to that of Lloyds," he said, referring to the successful sale by the British government of a 6 percent stake in partly-nationalized Lloyds (LLOY.L) last September for 3.2 billion pounds ($5.4 billion).
"The first (stake sales) will be smaller than the rest. We're thinking of between 5 and 10 percent. And it will be placed with many institutional investors."
Bankia became the symbol of Spain's financial crisis when it lost more than 19 billion euros ($26.00 billion) in 2012 because of soured real estate holdings and it needed almost half of a 41.3-billion-euro European aid package for Spain's ailing lenders.
Economy Minister Luis de Guindos told Reuters on February 13 that small stakes could be sold during the year before a bigger sale in the medium-term, although the state will retain a majority holding for some time.
Under Bankia's Europe-agreed restructuring plan, the Spanish government has until 2017 to sell the stake.
FROB said on Friday it has chosen Goldman Sachs to advise it on the sale of part of the government's controlling stake.
The bank would probably issue more debt this year after the sale of 1 billion euros of a five-year bond early in January, Goirigolzarri said in the interview.
($1 = 0.5977 British pounds)
($1 = 0.7307 euros)
(Reporting by Paul Day; Editing by Anthony Barker)