Spain's Colonial mulls sale of SFL stake

Troubled Spanish property firm Colonial is considering selling its stake in French SIIC Société Foncière Lyonnaise as part of efforts to extend a pile of debt maturing at end-2014.

Colonial, which owns a 53% stake in SFL, said it may sell part or the entirety of its interest in the French investment unit, the owner of a good-quality office and retail portfolio largely located in the central business district of Paris.

According to Spanish market reports, Colonial is hoping to receive bids for SFL by the end of June.

SFL owns assets valued at €3.8 bn and has a market cap of €1.8 bn, valuing Colonial's stake at nearly €1 bn.

The announcement by the debt-laden Spanish developer comes just after the expiry of the period granted to Madrid-based investor Villar Mir to present a binding offer for Colonial.

Grupo Villar Mir, an investor with interests ranging from fertilizers to construction, said last month that it considered investing in Colonial. According to local reports, it was planning to buy as much as 30% of Colonial via a capital increase which would inject some €700 mln into the company.

The company, owned by Juan-Miguel Villar Mir, did not however come forward with an offer by 5 June, when the offer period that it was granted terminated.

Colonial posted a loss of €24 mln in the first quarter of 2013 after a loss of €1.1 bn in full-year 2012. The major shareholders and creditors of the company are banks Crédit Agricole, Commerzbank, Royal Bank of Scotland, Caixabank, Banco Popular and Goldman Sachs.