(Adds details of sale)
MADRID, June 9 (Reuters) - Spanish builder Sacyr SA said on Monday it had agreed to sell property management company Testa to Merlin Properties for 1.79 billion euros ($2 billion).
In a statement to the stock exchange regulator, the builder said the deal would significantly improve its financial position.
Under the deal, Testa will reduce its capital and pay an extraordinary dividend to shareholders and will later carry out a capital increase in which Merlin will subscribe 25 percent.
That will give indebted Sacyr, which owns about 99.2 percent of Testa, an initial 238 million euros, followed by another 1.6 billion euros when it sells its stake in Testa to Merlin.
Sacyr had been studying the possible sale of shares in the unit for more than a year, in order to increase its free float of readily tradable shares and raise cash.
The move is part of a wider drive at Sacyr to complete a painful restructuring and debt-reduction strategy prompted by the bursting of a real estate bubble in 2008 and the subsequent economic crisis.
On Monday, Testa shares closed down 4.47 percent at 18.15 euros, valuing the company at 2.13 billion euros.
$1 = 0.8865 euros Reporting by Sarah Morris and Andres Gonzalez; Editing by Ken Wills and Lisa Shumaker