Colonial agrees refinancing 7 bln euros of debt
MADRID (Reuters) - Troubled Spanish property firm Colonial (COL.MC) said on Monday it had reached an agreement with its creditor banks to refinance a total of around 7 billion euros of debt.
A syndicated loan for 6.5 billion euros ($9.11 billion) would be converted into a long-term credit with repayment due in five years, the company said in a statement.
"The agreement also includes most of the company's non-guaranteed operational debt, taking the total restructuring to about 7 billion euros," Colonial said.
Following the announcement, Spain's third-largest bank Popular (POP.MC) said on Monday that it and savings bank La Caixa have withdrawn from Colonial's (COL.MC) core shareholders' pact.
In a statement, however, Popular said it and La Caixa both supported the refinancing deal.
A Popular source told Reuters that the bank did not plan to sell its 9.15 percent stake in Colonial, but added that as the shareholders' pact's objectives had now been met as far as the debt restructuring was concerned, they were withdrawing from the original agreement.
DEBT FOR EQUITY
In April, a group of banks and savings banks agreed to swap outstanding debts owed by Colonial for a stake in the company. The banking consortium holds about 23 percent.
It includes Banco Pastor (PAS.MC) and Valencia-based savings bank Bancaja.
"The original shareholders' pact was always transitional, so I don't think the fact Popular and La Caixa are pulling out is negative," Renta 4 analyst Nuria Alvarez said.
"I expect these banks to be included in the core shareholders who have agreed to subscribe to Colonial's convertible bond issue, if the need arises," she said.
As part of the refinancing agreement reached with its creditors, Colonial said it would issue 1.4 billion euros of bonds, convertible into shares at 0.25 euros each.
The maturity date for the bond issue is five years.
In the event the bonds are not fully subscribed, the creditor banks and "some of the company's main shareholders" have agreed to subscribe up to 1.3 billion euros in exchange for part of their outstanding debt.
Colonial's creditor banks are RBS (RBS.L), Calyon (CAGR.PA), Eurohypo and Goldman Sachs (GS.N). Continued...
