May 20, 2014 / 11:42 AM / in 4 years

UPDATE 1-Spain's Liberbank to bring in investors ahead of capital hike

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MADRID, May 20 (Reuters) - Spanish lender Liberbank said on Tuesday it was looking to bring in major investors through an accelerated share placement ahead of a planned capital raising, which it is carrying out to pay back state aid.

The bank, among lenders which took part of a 41.3-billion-euro ($56.66 billion) European rescue when it was hurt by a property crash, said it was in talks with various investors interested in taking a sizeable chunk of its capital.

Liberbank’s shares were up almost 5 percent at 1115 GMT, shortly after trading resumed. The stock was suspended earlier in the day, pending the announcement.

Spain’s Cinco Dias newspaper reported on Tuesday that Liberbank was in talks with unnamed Mexican investors, who were looking to take a stake of around 8 percent in the bank.

Liberbank, which declined to give further details of who it was negotiating with, said in its statement that no deal had yet been reached.

Several other Spanish banks have capitalised on the country’s economic recovery to attract foreign investors and help them boost their financial strength, which is under scrunity this year in Europe-wide health checks.

Bigger rival Banco Popular last year brought in Mexican investors at the same time as buying a stake in a small bank in the Latin American country, striking a deal with Mexico City-based bank BX+ and its controlling shareholders, billionaire businessman Antonio del Valle and his family.

Liberbank’s main shareholders - a group of saving banks - could reduce their stake to just under 50 percent through the accelerated share placement, from around 66 percent now, the bank said.

It has simultaneously hired Deutsche Bank to work on a 500-million-euro rights issue, which it will use to repay the 124 million euros in aid it took from Europe in the form of bonds that can be converted into capital. ($1 = 0.7289 Euros) (Reporting by Sarah White and Tomas Cobos, editing by Louise Heavens)

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