Spanish property company Colonial said on Friday that the stock market regulator CNMV has approved a plan by the company to issue convertible bonds worth EUR 1.43 bn to reduce the group's net financial debt by up to 16%. Colonial said shareholders will have an option to buy the bonds until December 20, after which the company's creditor banks will purchase the unsubscribed bonds for a maximum of EUR 1.3 bn. The banks are Goldman Sachs, Eurohypo, Calyon and Royal Bank of Scotland as well as Banco Popular and La Caixa.

Spanish property company Colonial said on Friday that the stock market regulator CNMV has approved a plan by the company to issue convertible bonds worth EUR 1.43 bn to reduce the group's net financial debt by up to 16%. Colonial said shareholders will have an option to buy the bonds until December 20, after which the company's creditor banks will purchase the unsubscribed bonds for a maximum of EUR 1.3 bn. The banks are Goldman Sachs, Eurohypo, Calyon and Royal Bank of Scotland as well as Banco Popular and La Caixa.

In a statement, Colonial said the bond issue would cut its net debt to EUR 7.546 bn from EUR 8.975 bn at the end of the third quarter. It added that the bond issue is expected to boost shareholder funds to EUR 2.58 bn, from EUR 1.151 at present.

The company said at end-November that it was 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). Colonial 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.