(Adds details, background)
By Sonya Dowsett
MADRID May 20 Debt-burdened Spanish real estate
group Realia said on Tuesday it had agreed to sell its
stake in French property vehicle SIIC de Paris at a
loss to investment group Eurosic.
Realia, controlled by Spanish builder FCC and
Bankia, said it would sell its 59 percent stake in
SIIC de Paris at 22 euros per share, valuing the French company
at around 948 million euros ($1.3 billion).
The move is the first step of a broader shake-up at Realia,
as FCC and partly state-owned Bankia seek to sell their combined
58 percent stake in the group. The two companies hired Goldman
Sachs in November to find a buyer for the controlling share.
Heavily-indebted FCC is looking to sell hundreds of millions
of euros worth of assets to pay off loans built up during
Spain's construction and property boom, while Bankia must sell
off non-core business under the conditions of a 2012 European
SIIC de Paris holds a portfolio of historic and modern
buildings in the centre of the French capital including in
high-end shopping square Place Vendome and prime office district
Realia said the sale would imply a reduction in net debt of
1.033 billion euros and would entail a book value loss of 82
million euros. The sale price is at an 11.43 percent discount to
net asset value - a measure of the SIIC de Paris fund's
performance, Realia said.
Shares in Realia were 4.3 percent higher at 0910 GMT, while
FCC and Bankia were little changed.
Realia said the offer for SIIC de Paris, once finalised,
would prompt Eurosic to launch an offer for all of the company
under French law.
The deal is subject to approval from fellow SIIC de Paris
shareholder Societe Fonciere Lyonnaise and competition
authorities, and would be formalised by June 6, Realia said.
FCC and Bankia are looking to sell the rest of their Realia
holdings, including office buildings and shopping centres in
Madrid and Barcelona.
($1 = 0.7289 Euros)
(Editing by Keiron Henderson)