The Council of
Ministers has authorised the Sociedad Estatal de Participaciones Industriales
(SEPI) to sell up to 33 million shares of Repsol, S.A.. These shares represent
up to 11% of capital equity.
The amount of the offer that has just been
authorised, bearing in mind Repsol's current share price, is approximately 133
billion pesetas, making it, in terms of volume, one of the most important
operations to be carried out in Spain.
SEPI currently owns 21% of Repsol
capital equity, so this authorization means that the State interest in the
company will fall to 10%. SEPI has the right to determine the instruments and
set the terms for the placement as suitable for operations of this
type.
This share offering takes place following the passing of the Royal
Decree for the application of the Law on Divestment of State-owned Shares to
Repsol, in view of the fact that this Public Share Offering will reduce the
State's holding to below 15%.
This placement is directed to minority and
institutional investors alike and will take place on national and international
stock markets. There will be special incentives to encourage small investors to
enter Spain's top company. Tranches will be flexible, according to
demand.
Repsol began its privatization in 1989 with a public share
offering which lowered the stake held by INH to 69%. In 1990, the Mexican oil
company, PEMEX, took up a 2.9% holding, and further increased it to 5% in 1992.
In that year, Repsol launched an issue of exchangeable bonds and, in 1993, an
offering to the institutional market. In April 1995, another public offering of
19% was made. These successive privatization processes have produced an income
of approximately 570 billion pesetas.
Over the first nine months of last
year, Repsol reported a net income of 92,149 million pesetas, showing a 32.7%
rise over year earlier figures for the term. Operating income was 32.1% higher,
at 168,489 million pesetas, whilst cash-flow rose by 20.8% to reach 188,998
million pesetas.
Repsol's solid financial situation, the good results
achieved in the past financial year, the success of former privatizations, good
future prospects from the exploitation of new fields and a company strategy
which has permitted the company to report continuous profit growth over recent
years would indicate that this transaction will meet with high acceptance on the
part of investors.
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