February 5, 2014 / 12:05 PM / 4 years ago

UPDATE 1-Spain to seek advisers for Bankia sale

(Adds details, background)

By Carlos Ruano

MADRID, Feb 5 (Reuters) - Spain’s bank restructuring fund FROB is looking to hire at least one investment bank adviser shortly to help it steer a privatisation strategy for bailed-out lender Bankia, according to a FROB document seen by Reuters.

Bankia’s huge losses in 2012 made it a symbol of Spain’s financial crisis when it needed almost half of a 41.3 billion-euro ($56 billion) European bailout.

The bank, which returned to profit in 2013, said earlier this week that the government was preparing to start selling its 68 percent stake. Sources told Reuters last month the government was considering a partial sale as early as the first quarter.

The FROB document, which listed the conditions under which the appointments will be made, said advisers would also be allowed to participate as bookrunners in the sale of part of the state’s Bankia holding.

Banks have until this Friday to pitch for the FROB mandate.

Some of Bankia’s Spanish rivals, including Santander and Banco Popular, have already said publicly they would be keen to work on a share offering as bookrunners.

Bankia said on Monday that the privatisation would likely be done in chunks and could take around two years, and that there was no definitive plan yet for the first phase of the sale.

Spain’s economy ministry and the FROB are keen to follow a privatisation model used by Britain to sell part of the UK’s holding in part-nationalised bank Lloyds, sources familiar with their thinking have said.

UK Financial Investments, which manages Britain’s stakes in rescued banks, sold 6 percent of its Lloyds holding in a share sale last September and is expected to sell more of its stake this year. ($1 = 0.7402 euros) (Writing by Sarah White, editing by Tracy Rucinski and Jane Merriman)

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