Inmobiliaria Colonial's shares soared in stock market dealings Monday after Luis Portillo, Colonial's largest shareholder, sold about 25% of Colonial's share capital to his creditor banks. Portillo has transferred a total 403 million shares, or a 24.58% stake, to a group of eight banks led by Banco Popular - which received a 9.15% stake - and La Caixa (5.42%), according to a statement to the Spanish securities watchdog CNMV issued after the market closed on Friday.

Inmobiliaria Colonial's shares soared in stock market dealings Monday after Luis Portillo, Colonial's largest shareholder, sold about 25% of Colonial's share capital to his creditor banks. Portillo has transferred a total 403 million shares, or a 24.58% stake, to a group of eight banks led by Banco Popular - which received a 9.15% stake - and La Caixa (5.42%), according to a statement to the Spanish securities watchdog CNMV issued after the market closed on Friday.

At about 2.30pm in tradings on the Madrid stock exchange, Colonial stocks were trading at EUR 1.04, up 18.2% from their previous close after rising as much as 19% in earlier dealings.

The Spanish property mogul has swapped all his Colonial shares in return for the cancellation of debt he had signed with the bank consortium. Banks Caixa Galicia, Bancaja, Caixanova, Banco Pastor, Banco Sabadell, and Bankinter wrapped up a 10% stake in the debt-laden company in exchange for Portillo's loans. Earlier this month, French bank Natixis swapped debts into a 5.4% stake in the company.

Colonial has lost 70% of its value over the last six months in the face of declining property values and banks' disinclination to lend in the current market crisis. Portillo, who resigned as chairman at end-December following the share slump, tried to broker a deal with the Investment Corporation of Dubai (ICD), but the deal fell through as the sovereign wealth fund failed to reach an agreement with Colonial's creditors.

Colonial's second-largest shareholder with a 12% stake, Nozaleda, is also in negotiations with banks to swap some of his loans for Colonial shares.