Colonial raises EUR 1bn from sale of FCC, SFL stake

Spanish troubled property company Colonial said that it has raised EUR 1.043 bn from the sale of a 14.31% stake in construction group Fomento de Construcciones y Contratas (FCC) and a 30.56% interest in France's Societe Fonciere Lyonnaise. The capital will be used to pay down its EUR 7 bn of debt.

The company said that creditor banks, the Royal Bank of Scotland, Eurohypo, Calyon, and Goldman Sachs have exercised their call options to buy a 3.4% stake each in FCC and a 7.25% interest in SFL. As a result, Colonial has cut its stake in SFL to just 54%.

Colonial said in late November that it was offering its banks an option to acquire a stake of up to 15.45% in the Spanish construction group and a 33% interest of its French subsidiary. The banks could exercise the buy option until 10 January.

Colonial agreed to sell its interests in SFL and FCC in September as part of an agreement with banks to restructure its EUR 7 bn debt mountain. The company is also seeking to sell part of its shopping centre development unit Riofisa.