The fragile Spanish stock market situation is troubling highly-indebted countries. According to sources consulted by elEconomista, Corporación Financiera Alba, who accounts for 17% participation in the Actividades de Construcción y Servicios (ACS), sent a message to the construction company president, Florentino Pérez, to let him know about the need to undertake a debt refinancing process before the company?s financial situation worsens.
The latest ups and downs in the stock market have been brought to the attention of the March brothers, major partners in Alba. The company?s net debt was 8.8 billion dollars at the end of the first quarter, according to data submitted by the Comisión Nacional del Mercado de Valores (CNMV), the government agency responsible for regulating the financial securities markets in Spain. This amount does not include the 3.073 billion associated with the renewable shares that the company is selling in five issuances. Four deals have been completed. But similar to Clece, who tried to complete deals with Permira and Mercapital in March but couldn?t finalize, the fifth debt issuance is struggling to find financing.
ACS also has to address debt payments that will be due this fiscal year. They total 2.2 billion euros in 2011 and another 7.1 billion in 2012. Urbraser and Hochtief debt figures prominently. It would be necessary to undertake the refinancing process or reduce exposure to financial investments that it does not control.
The biggest part of ACS debt does not relate to the company?s main business, construction and services, but is linked to interest in other companies such as Iberdrola (4.747 billion euros) or Hochtief (886 milliion). These two companies total 5.603 billion euros, or 64% of the deb ACS carries. On February 10, Residencial Montecarmelo, a subsidiary of ACS, signed an agreement to refinance 2.059 billion euros on December 28, 2011.
The existing credit would be re-sold for a three-year period. Within the same agreement, leaders would sign various contracts for interest rates up to 90% of the amount of the original syndicated loans, which were sold in July.
