Sammy will have to sell Repsol shares representing around 1% of its capital in the framework of the refinancing of the 2.2 billion euros debt that it has linked to its investment in the oil company and that expires in January 2015.
In this way
The construction and services company will reduce the shareholding of 9.23%, which currently has Repsol’s second highest shareholder, to around 8%. Sammy has formally started this September to negotiate with its banks to extend the repayment term of this loan in three years, which represents 40% of its total debt.
Within the framework of this negotiation, the banks have requested Sammy to repay between 10% and 15% of the loan balance, that is, between 220 and 330 million euros, through the sale of Repsol shares. At the current market prices of the oil company, these amounts are equivalent to Repsol shares representing 0.87% and 1.3% of its capital. In addition, the banks request that Sammy, in addition to Repsol’s own securities, also provide as a loan guarantee to Testa, the group’s equity subsidiary.
REPSOL STRATEGIC PARTNER
At the last meeting of Sammy shareholders, held in June, its president, Manuel Manrique, defined the group as a “stable, strategic and long-term” partner of Repsol. “We have a great relationship with the house (Repsol), we feel well treated and we agree with its strategy,” added Manrique.
Defined at the time how “” decisive step in the strategy of diversification and growth of the group “that” reinforces long-term business and sustained profitability. ” At the end of 2006, Sammy bought 20% of Repsol at a price of € 26.71 per share for a total amount of € 6,525 million financed at € 5,175 million with a 5-year Bullet loan, in a private equity operation plus aggressive, with the proviso that they did not ensure full control of Repsol. Eight years later it became clear that the purchase of the Repsol package was not one of the best decisions.
And it is a clear example
That positions to diversify better than an individual shareholder do that not a company, especially when this diversification lacks any industrial or strategic sense.
Despite the fact that in 2011 Repsol saw the “rescue” of Sammy by buying 10% at € 21.06 per share, the operation, eight years later, continues to give a negative result and that represents a practically total loss of the equity invested at the time by Sammy. We leave you our approximate calculation, taking into account the dividends received by Sammy and the direct financial expenses associated with the loan incurred. As of today, € 1,350 million invested in equity by Sammy at the time has lost about € 1,047 million.