Cementos Portland Valderrivas to reduce debt by capitalizing a loan from FCC
The Board of Directors of Cementos Portland Valderrivas will ask the Shareholders' Meeting on 29 April to approve a capital increase by capitalising a subordinated loan from FCC, including accrued interest.
The increase will be performed at €8 per share, and 13,878,094 ordinary shares will be issued, 36% of the current number outstanding. The price of the increase was determined using the average share price in the market in the last quarter, which was €7.99. The share closed at €7.70 yesterday.
This operation will strengthen CPV Group's balance sheet by increasing equity and reducing debt, which, in turn, will lead to a decline in financial expenses. FCC's stake in the company will also increase, from 69.8% currently to 78%, notably strengthening the company's position vis-à-vis potential M&A. Net debt reported by CPV Group at 2013 year-end will be reduced by 8.1%.
The loan is part of the syndicated financing agreement between Cementos Portland Valderrivas and a group of banks, signed on 31 July 2012, for 1.114 billion euro. It included an agreement for financial support between FCC and CPV, whereby the former committed to contribute equity in the form of a capital increase or subordinated debt in the amount of 100 million euro.
Fomento de Construcciones y Contratas SA (FCC) is a Spain-based company primarily engaged in the provision of environmental services. The Company's activities are divided into four business areas: Environmental services, Construction, Water management and Cement. The Environmental services division focuses on street cleaning, maintenance of urban parks and gardens, industrial waste management, waste treatment and recycling, among others. The Construction division offers engineering and construction of civil works, such as roads, railways, airports and hydraulic projects, as well as residential and non-residential buildings. The Water management division operates an integrated water management cycle, which includes intake, purification, treatment and distribution of the waste water. The Cement division manufactures cement, concrete, aggregate and mortar. The Company operates through numerous subsidiaries in Europe, the Americas, Africa and the Middle East region.
FOMENTO DE CONSTRUCCIONES Y CONTRATAS, S.A. 
By 
