MADRID, March 21 (Reuters) - Spanish property company Colonial said on Friday it has abandoned plans to sell part of its 53 percent stake in French business Societe Fonciere Lyonnaise (SFL) and will instead issue more new shares to raise funds.
Barcelona-based Colonial, already in a deep restructuring plan to emerge from Spain’s 2008 real estate market crash, said it will ask shareholders to approve on April 8 a new rights issue worth 266 million euros ($367 million).
This comes on top of an already-approved 1 billion euro capital raising plan which will include the injection of cash from new investors in exchange for a stake in the company.
The investors, including Spain’s Villar Mir group which will hold about 30 percent of Colonial, had conditioned their investment on Colonial retaining control of the French property firm, considered the Spanish company’s crown jewel.
Spain’s own real estate sector is also making a comeback, with new property investment vehicles attracting U.S. fund managers George Soros and John Paulson. [ID:nL6N0M038J ($1 = 0.7255 Euros) (Reporting by Jose Elias Rodriguez; Writing by Tracy Rucinski, editing by William Hardy)