Colonial gives banks option to acquire FCC, SFL stakes

Spain's troubled property group Colonial is offering its creditor banks an option to acquire its 15.45% stake in construction group Fomento de Construcciones y Contratas (FCC) as well as its 33% interest in French property firm Societe Fonciere Lyonnaise (SFL). In a statement to the Spanish stock market authorities CNMV, the debt-strapped firm said that it will continue to look for buyers for the stakes despite giving the purchase option to a consortium of creditor banks including Calyon, Eurohypo, Goldman Sachs and the Royal Bank of Scotland. The banks can exercise the buy option from December 11 to January 10.

The company agreed to sell its interests in SFL and FCC in September as part of an agreement with banks to restructure its EUR 7 bn mountain of debt. The company also said it would sell part of its shopping centre development unit Riofisa. The funds raised by the disposals will be used to repay the new loan, whose maturity date was extended to five years. Colonial spent over EUR 3.5 bn on the Riofisa and FCC stakes in 2006 and 2007.

If the four banks exercise the buy options, they will hold 3.4% of FCC and 7.25% of SFL each, with the other members of the banking syndicate holding the remaining 1.87% and 3.99% respectively.