Duro Felguera has reached a memorandum of understanding for the entry into its capital as industrial partners of the Mexican Grupo Prodi and Mota-Engil Mexico, which would contribute 90 million euros to acquire a maximum of 55 percent of the Spanish multinational, the company informed the Spanish Securities and Exchange Commission (CNMV) on Tuesday.
Duro Felguera has highlighted that, with this agreement, “a key milestone in the roadmap initiated three years ago” for the implementation of “a definitive solution” to the situation of the company, which in 2021 was subject to a temporary public bailout of 120 million euros by the Solvency Support Fund for Strategic Companies of the State Industrial Ownership Corporation (SEPI), and another 6 million euros by the Principality of Asturias.
The final objective, the engineering and capital goods group has pointed out, is “to ensure the long-term viability and sustainable growth of Duro Felguera”, since these are two companies that will not only provide resources but will also be involved “in a stable manner in the composition of the shareholding in their capacity as industrial partners”.
“This will generate opportunities with new industrial projects, provide synergies for business expansion and growth in international spheres”, added Duro Felguera, which hopes to obtain “a strong and solid position in the market and become one of the main operators in the sector”.
The Prodi Group, controlled by José Miguel Bejos, is a Mexican industrial company whose main activity is the design and construction of public infrastructure, public transport, oil and gas, energy and tourism projects, among others.
It also has a 49 percent stake in the other investor, Mota-Engil Mexico, the head of a business group whose ordinary activity is focused on civil works, infrastructure, concessions and engineering, energy, industry and tourism, which in turn is 51 percent owned by the Portuguese business group Mota-Engil.
Duro Felguera, which relies on the approval of the shareholders’ meeting, has stressed that the entry of resources is “essential for the long-term viability” of the company and therefore “has the priority purpose of cleaning up its balance sheet and ensuring the continuity of its business”.
THE INVESTORS WOULD ACQUIRE A MAXIMUM OF 55% OF DURO FELGUERA
According to the agreement, Grupo Prodi will provide Duro Felguera with a loan of 50 million euros and Mota-Engil Mexico with another loan of 40 million euros, which the Asturian multinational will repay through a capital increase of 90 million euros that will include the capitalisation of these loans.
The capital increase will include a first agreement, with cash contributions and preferential subscription rights in favour of the current shareholders, for a maximum amount of up to 40 million and specifically aimed at the reintegration of the loan granted by Mota-Engil Mexico.
In addition, a second agreement of up to 90 million euros plus interest will be included, whereby the loans will be capitalised upon maturity.
Firstly, the Prodi Group will capitalise the loan it has granted, and secondly, Mota-Engil Mexico will capitalise the loan.
According to Duro Felguera, the capitalisation of the loan granted by Mota-Engil Mexico will be made in an amount equal to the difference between the amount of the loan from Mota-Engil Mexico and the accrued interest minus the amount subscribed by the shareholders of Duro Felguera in the first agreement of the capital increase.
Based on an average share price of 0.7661 euros per share, calculated with the average market closing price of the three months prior to the agreement, the Prodi Group would acquire 31 per cent of the voting rights of Duro Felguera after the capital increase and Mota-Engil México could acquire a maximum of 24 per cent, depending on the amount subscribed by the current shareholders in the first agreement.
In this way, Grupo Prodi and Mota-Engil México, which will submit an application to the CNMV for exemption from the obligation to make a takeover bid once the requirements have been met, could acquire up to 55 per cent of the voting rights and both would act in concert through a syndication agreement.