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UPDATE 1-Unicaja pushes ahead with listing, shrugs off Spanish banking troubles
June 15, 2017 / 5:30 PM / 6 months ago

UPDATE 1-Unicaja pushes ahead with listing, shrugs off Spanish banking troubles

* Unicaja to issue up to 687.5 mln new shares

* New shares to be issued at 1.1-1.4 euro each

* Bank would be valued at 1.7 blns-2.3 bln (Adds details, background)

By Andrés González and Pamela Barbaglia

LONDON, June 15 (Reuters) - Spanish bank Unicaja is moving ahead with a stock market listing that could raise up to 925 million euros ($1.03 billion), just days after rival Banco Popular had to be rescued, raising questions over the strength of Spain’s banks.

Unicaja will issue up to 687.5 million new shares to institutional investors at between 1.1 euros and 1.4 euros per share, it said in a statement to Spain’s market regulator, confirming a Reuters report earlier on Thursday.

The initial public offering would value the bank at between 1.7 billion and 2.3 billion euros, it said.

The rescue of Banco Popular last week, in which shareholders and junior bondholders were wiped out, had cast doubt over whether Unicaja’s listing would go ahead.

Like Popular, Unicaja has a bad loan ratio above the average of its rivals and banking industry sources said its business model, mostly focused on selling mortgages in the rural Spanish regions of Andalusia and Castilla and Leon, might not appeal to investors.

With 56 billion euros of assets, it currently controls 2 percent of Spanish deposits.

Unicaja had been due to list before March this year as a condition for indirectly receiving public aid when it bought out smaller rescued bank CEISS.

It obtained a grace period from the European Commission but the new deadline has not been disclosed.

Unicaja aims to use the proceeds of the sale to repay public aid worth 604 million euros, increase its stake in CEISS and for general corporate purposes.

The sale will also mean the current majority shareholders, a group of former savings banks which currently owns 86.7 percent of the lender, could see their stake fall below 50 percent if the full amount of shares are sold.

$1 = 0.8966 euros $1 = 0.8973 euros Additional reporting and writing by Jesús Aguado; Editing by Julien Toyer and Jane Merriman

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