July, 13th 2012
ACS refinances its Iberdrola debt for an amount of 1,600 million Euros
This agreement assures a stable financing of the investment that ACS holds in Iberdrola, eliminating the need to provide additional guarantees
The transaction limits the exposure to Iberdrola share price drops while grants benefits to ACS if the share price increases
Residencial Montecarmelo S.A., a wholly owned subsidiary of ACS, has signed with the bank Société Générale a financial transaction that allows to substitute the loan currently held with a syndicate of banks, in which Banco Bilbao Vizcaya Argentaria, SA ("BBVA") acted as agent. The transaction accounts for 1,600 million Euros.
This refinancing has been signed for a period of three years. At the end of this period, ACS will decide the future steps of its investment in Iberdrola. The new agreement includes the subscription of certain derivative instruments and a stock loan agreement on Iberdrola shares, which eliminates the need to provide additional guarantees in the case of an Iberdrola share price reduction from the current levels.
This transaction guarantees a stable long term financing of ACSs investment in Iberdrola without the requirement to provide guarantees depending on the Iberdrola share price, limits the downside economical exposure of ACS and grants at the same time the benefits of a potential increase of value in Iberdrola shares.
This process is a fundamental step in the execution of Grupo ACSs corporate strategy, which is carrying out a rigorous financial plan to reduce debt and to eliminate the requirements of additional guarantees on its financial structure.
Grupo ACS keeps a solid cash flow generation capacity (EBITDA in the first quarter of 2012 accounted for 664 million Euros) and healthy profits out of its operating businesses (Net Profit from the operating activities in the first quarter of 2012 of 209 million Euros). ACS is one of the companies with the lowest net debt to EBITDA ratio of the industry.