Lloyds agrees sale of Spanish retail banking operations to Sabadell

UK’s Lloyds Banking Group plc (LON:LLOY) on Monday said it would sell its retail banking activities in Spain to local lender Banco de Sabadell SA (MCE:SAB) in a cash and stock transaction, as part of plans to rationalise international presence.

Under the agreement, Lloyds will sell to Sabadell its Spanish retail and private banking business and the local investment management business, including Lloyds Bank International SAU and Lloyds Investment Espana SGIIC SAU, in exchange for 53.7m Sabadell shares, or 1.8%, valued at €84m ($110m) and a further up to €20m in cash, the vendor said.

The assets involved in the divestment were worth some £1.52bn ($2.4bn/€1.8bn) as of 31 March 2013, comprising customer lending, while customer deposits were around £670m.

Lloyds said it would use any cash from the sale for general corporate purposes.

Spain’s Telefonica considers asset disposals in a move to cut debt

Spanish telecom operator Telefonica SA (MCE:TEF) is mulling over additional divestments, which may include its Irish and Czech operations, assets in Central America and its minority holding in China Unicom (Hong Kong) Ltd (HKG:0762), Bloomberg reported, quoting people in the know.

The Irish and Czech units were tipped as being a high priority for sale.

The company has not decided yet on the disposals, which would be part of its drive to cut debt, and has not mandated banks to handle the processes, the sources said.

Telefonica had received a bid for Telefonica Czech Republic AS, which includes Slovakia, from a financial firm in 2012 but dismissed it as too low, two of the insiders told the agency.

The Spanish company shed around half of its holding in China Unicom in June, entering into a one-year-long lock-up for the remaining 5%.

Telefonica has assets in Central America in Guatemala, Panama, Costa Rica, El Salvador and Nicaragua.

Telefonica may bag EUR1bn (USD1.3bn) from its Irish and Central American businesses and also EUR1bn from a sale of a 19% stake in Telefonica Czech Republic, which would trim its holding to 50% in the Czech operator, Bloomberg said, citing estimates of FM Capital Partners Ltd. The 5% stake in China Unicom is worth USD1.6bn, the agency added.

Spain’s Iberdrola sells stake in gas pipeline operator Medgaz

Spanish utility major Iberdrola SA (MCE:IBE) on Friday unveiled a EUR146m (USD193.4m) deal to sell its 20% stake in gas pipeline operator Medgaz SA to Fluxys Belgium NV (EBR:FLUX).

Medgaz was set up in 2001 to design, build and run a pipeline that connects Algeria to Spain. Other shareholders include Spanish oil group Cepsa and Algeria’s Sonatrach, which were its initial founders.

Spain-based Medgaz operates a deep water gas pipeline from Algeria to Europe through Spain, the first such project built at 2,000 metres in the Mediterranean Sea.

The pipeline is to supply gas from Beni Saf on the Algerian coast to Almeria in Andalusia region of Spain, according to Medgaz’ website

Spain to offload stake in satellite operator Hispasat to Abertis

The Spanish government plans to dispose of its interest in local satellite operator Hispasat SA, selling the stake to Abertis Infraestructuras SA (MCE:ABE), Spanish news agency Europa Press reported.

The state owns 25% of Hispasat’s stock via several public sector entities. They are Instituto Nacional de Tecnica Aeroespacial (the National Institute of Space Technology, or INTA) with an interest of 16.42%; Sociedad Estatal de Participaciones Industriales (the State Company for Industrial Shareholdings, or SEPI) with 7.41% and Centro para el Desarrollo Tecnologico e Industrial (the Centre for Technological and Industrial Development, or CDTI) with 1.85%.

Abertis – the Spanish operator of toll roads, airports and telecommunications infrastructures – currently owns 47% of Hispasat’s shares. The company increased its holding in February, when it acquired the stake held by telecommunications giant Telefonica SA (MCE:TEF). French-based Eutelsat Communications SA has an interest of 27.69%.

Europa Press cited SEPI president Ramon Aguirre as saying that members of the government had already agreed among themselves to greenlight the deal.

Hispasat was established in 1989, starting out with the objective of providing broadcast services to the Spanish and Portuguese language markets. Over the years, the company has kept expanding its satellite fleet and its portfolio of products and services. It now provides audio-visual, corporate, government, broadband and consultancy services, operating in markets across Europe, Latin America and North America.

UK online food website firm Just-Eat acquires Spanish rival SinDelantal

UK-based online food ordering websites operator Just-Eat Ltd said on Wednesday it had bought its main Spanish competitor SinDelantal Internet SL without revealing the financial terms of the transaction.

Through the acquisition, Just-Eat will bring in about 1,300 additional restaurants to its Spanish website, the buyer said. It intends to expand its network to more than 3,000 delivery restaurants next year, thereby generating additional revenues of tens of millions of euros for restaurant owners. According to the company, this transaction helps it consolidate its position as number one in Spain.

The purchase of SinDelantal.com is the first one for Just-Eat following its GBP40m (USD64.5m/EUR49.9m) funding round in April, which was led by Vitruvian Partners LP.

The acquired online business was established by Diego Ballesteros and Evaristo Babe in 2010, both of whom will remain with the firm. SinDelantal.com has presence in Mexico since January 2012, when it bough local business Miorden.com.

Since its inception in 2001, Just-Eat has established presence in 13 countries around the world and received over 50m orders. At present, it has more than 28,000 takeaway restaurants signed up to its website and generates over GBP400m in annual revenue for the particular industry.

Unemployment in Spain reaches new heights as tourism trade slows

Unemployment in debt-ridden Spain rose by 1.7% in September, according figures released by the country’s Labour Ministry on Tuesday.

The increase in unemployment last month follows an increase in August, with 4.7 million Spaniards currently out of work.

Analysts attribute the increase to redundancies in the service sector as the steady flow of summer tourists slows, with seasonal jobs being terminated in the winter months.

“There is a certain slowing down in the rate of increase in unemployment but the negative side is that jobs are still disappearing,” Estefania Ponte, head of economy at trading house Cortal Consors, told Reuters.

Ponte said that today’s monthly figures suggested that the unemployment rate in Spain will mostly exceed 25% in the third quarter.

Unemployment in Spain, one of Europe’s largest economies, is the highest in the European Union. Analysts are also expecting that recent floods due to torrential rains could further dent tourism activity.

 

Spanish deposits shrink by €74bn as recession deepens

Depositors in recession hit Spain withdrew EUR74bn from the country’s banks in July, according to figures from the European Central Bank (ECB).

The deposit loss equals 7% of Spain’s GDP in a single month, with the total loss at about 11% in the first seven months of 2012.

The flight of funds from Spain mirrors the situation of Greece, with analysts speculating that the capital is being diverted to German bank accounts and perceived safe havens, such as London property.

Official figures in Spain, released yesterday, show that the country is in a double-dip recession and the region of Catalonia approached Madrid for a EUR5bn rescue package.

Spain’s statistical office said on Tuesday that the country’s economy contracted in the second quarter, with GDP sliding by 1.3% compared to the second quarter of 2011.

France’s Credit Agricole still interested in selling stake in Spanish Bankinter

French banking group Credit Agricole SA (EPA:ACA) views the stake it owns in Spanish peer Bankinter SA (MCE:BKT) as non-strategic and it is still considering all options regarding a further sale of Bankinter shares, CEO Jean-Paul Chifflet told a news conference on Tuesday.

According to Chifflet, Credit Agricole has recently cut its stake in the Spanish bank below the 20% threshold, but has made no decision as to the rest of the Bankinter holding.

However, Chifflet added that the Bankinter stake is among several non-strategic foreign investments that his bank plans to lower.

In an interview published by French newspaper Les Echos in December 2011, Credit Agricole’s chief executive said his company remained open to all options regarding its Bankinter interest. The stake the French bank holds in Portuguese lender Banco Espirito Santo SA (ELI:BES) was also mentioned by Chifflet as a potential target for sale.

Bankinter is the parent of domestic financial group Grupo Bankinter, which also includes financial firms Bankinter Gestion de Activos SGIIC, Bankinter Seguros Generales SA de Seguros y Reaseguros, Hispamarket SA, Intermobiliaria SA, Bankinter Consumer Finance EFC SA, Bankinter Capital Riesgo SGECR SA, Bankinter Sociedad de Financiacion SA and Relanza Gestion SA.

As of 31 December 2011, the bank’s main shareholder was Madrid-based Cartival SA with a stake of 23.91%.

UK’s 3i sells Spanish Esmalglass to Bahrain-based Investcorp

British private equity investor 3i Group Plc (LON:III) said today it had divested Esmalglass-Itaca, a Spanish supplier of intermediate products for the ceramic industry, to Bahrain-based investment manager Investcorp for an unspecified amount.

3i made its first entry into the Spanish firm in 2002 when it bought a 49% stake in it for EUR230m (USD282.5m) as part of a management buyout of the whole company. Later in 2004 it acquired the remaining 40% of Esmalglass’s unit Itaca, specialising in colours manufacturing for the ceramic industry.

Commenting on the deal, Oscar Gomez, director at 3i, said that Esmalglass had expanded over the last decade through internationalisation and strengthening its top market position, and its acquisition by Investcorp would back its new business plan and enhance its value.

According to Antonio Blasco and Vicente Bagan, co-CEOs of Esmalglass, the sale of the company to a “highly complementary partner” such as Investcorp provides it with significant opportunities for further international growth.

Esmalglass, which was founded in 1978, produces ceramic glazes and colours as well as inkjet inks, which are used for the decoration of tile surfaces. It has plants in Spain, Brazil, Portugal, Italy, Russia, Indonesia and China, as well as large design and technical assistance teams in all the major ceramic markets globally. In 2011, Esmalglass generated revenues of some EUR270m.

Fears of sovereign bailout for Spain grow

Asian shares fell and the euro hovered near multi-year lows earlier on Monday as Spain ignited concerns about its ability to resist a sovereign bailout after two indebted regions looked for financial assistance from the central government.

Concerns that the Eurozone’s fourth largest economy will be forced to follow Greece, Portugal and Ireland drove 10-year US Treasury yields to a record low 1.4365% early in Asia.

Greece, Portugal and Ireland were bailed out by international lenders after the borrowing costs of all three countries rose above sustainable levels.

According to a report by the BBC on Friday Valencia asked the central government for a financial lifeline and on Sunday a local newspaper in Murcia quoted the head of its government as saying it would ask for funding help of up to EUR300m.

Today, the Bank of Spain reported that the country’s economy contracted by 0.4% in the three months prior to the end of June 2012.

Financial worries in Spain were said to have triggered selling in oil, which sent both Brent and US crude down by over USD1 at USD105.43 a barrel and USD90.34 a barrel respectively, while prices of corn and soybeans eased from record highs reported on Friday.

European stocks are expected to extend losses seen on Friday while US stock futures decreased by 0.5% which indicated a slow start in Wall Street, leading to financial spreadbetters calling for the main indexes in London, Paris and Frankfurt to open down by up to 1.5%.

MSCI’s broadcast index of Asia-Pacific shares outside of Japan fell by 2.2%, which would mark its biggest drop in one day in around two months.

Justin Harper of IG Markets said that “The fear now is that, given its debt woes, Spain may eventually need a bailout from the International Monetary Fund or the eurozone’s rescue fund,”