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Spain close to privatising insurer Cesce insurer - sources
January 2, 2014 / 12:35 PM / 4 years ago

Spain close to privatising insurer Cesce insurer - sources

MADRID, Jan 2 (Reuters) - Spain is close to selling its 50.25 percent stake in Cesce, Europe’s fourth-biggest credit insurer, in a deal that values the company at 400 million euros ($551 million), three bankers with knowledge of the deal said.

Spanish insurers Mapfre and Mutua Madrilena, French insurer Coface and at least one other international insurer, have expressed interest in the asset, the sources told Reuters.

Spain has few state enterprises left to sell after a big wave of privatisations two decades ago. But as a result of the country’s financial and economic crisis of the last five years, the government has looked at selling Cesce, airport operator Aena and the state lottery company.

Cesce originally specialised in export credit insurance, which protects a company if a foreign buyer fails to pay for products. But it has now branched out into wider commercial risk coverage.

Banks including Spain’s Santander and BBVA own 45.85 percent of Cesce and Spanish insurance companies hold the remaining 3.9 percent.

“It’s about to go down. There won’t be any trouble selling it, there’s a lot of interest in the asset,” said one of the bankers. All three of them declined to be named for this story.

Mutua’s chief executive has said publicly the company is interested in Cesce. Mapfre and Coface declined to comment.

A spokeswoman for Cesce did not respond to a request for comment.

Spain’s Secretary of State for Trade Jaime Garcia-Legaz said in December that the sale of Cesce would be closed in 2014, but without providing details. He has also said the Spanish state was not interested in breaking up its Cesce stake, but in selling it in one piece.

PWC is the financial advisor on the sale and Perez-Llorca the legal advisors.

Cesce had after-tax profit of 27.4 million euros and net equity at the end of 2012 of 319 million euros.

Spain is also consulting bankers about selling a minority stake in airport operator Aena, but that sale is taking time because the company is highly indebted and traffic at one of its main airports, Madrid’s Barajas, has slumped. ($1 = 0.7257 euros) (Additional reporting by Fiona Ortiz and Jesus Aguado; Writing by Fiona Ortiz; Editing by Erica Billingham)

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