MADRID, March 7 (Reuters) - Spain’s Liberbank is aiming to float on the stock market at the end of April, two sources familiar with the situation said, in what would be the first new listing of a lender since Spain requested a European rescue for the ailing sector.
Mid-sized Liberbank, the combination of three savings banks with operations in the northern regions of Cantabria and Asturias and southern Extremadura, was rescued in 2012 as part of a 41-billion-euro bailout of Spain’s banks, brought low after years of uncontrolled lending to the property sector.
Its flotation, along with sales of stakes in several Spanish companies and transfers of toxic real estate assets into a so-called bad bank, is a condition of the restructuring plan agreed with the European Union in return for receiving 124 million euros of aid.
The deal could happen by the end of April or early May and would involve converting 860 million euros of preference shares and subordinated debt into ordinary shares, which would then be formally floated, the sources said.
Such an operation would remove some of the risk of the listing failing through a lack of demand.
The bank, which was valued at 1.1 billion euros by Spanish bank restructuring fund FROB and was found to have a capital gap of 1.2 billion euro euros ($1.56 billion), is aiming to have around 25 percent of its capital in the hands of new shareholders, one of the sources said.
Liberbank declined to comment.
The listing would come nearly two years after the ill-fated initial public offering of Bankia, another amalgamation of former savings banks, which was rescued last year less than 12 months after the IPO.
That listing is still the target of public fury in Spain, as hundreds of thousands of ordinary Spaniards who bought into Bankia’s IPO are set to be practically wiped out after it had to take 18 billion euros in European aid.
Although the swap gives Liberbank the benefit of a ready-made base of initial investors, the deal could still face risks.
Just under 550 million euros of the subordinated debt and preference shares are in the hands of retail investors, with the rest owned by institutional investors.
But these initial investors will have to convert out of their other securities at a discount still to be decided and might immediately want to sell the new shares.
As a result, one of the sources said Liberbank will likely still follow usual IPO marketing practices, like a roadshow, in order woo other investors.
Liberbank on Friday said it was reducing its capital to bulk up reserves and its theoretical share price was 0.30 euro.
The lender has been shedding assets to try and bulk up its capital in other ways too, reducing its holdings in energy groups Enagas and EDP.
It has also transferred nearly 3 billion euros of soured real estate assets to a so-called bad bank set up by the government. ($1 = 0.7692 euros) (Editing by Julien Toyer and Leslie Adler)