Promotora de Informaciones SA, the publisher of Spain’s El Pais newspaper, will get an agreement from its banks to refinance about 2.92 billion euros ($3.81 billion) of debt, according to two people familiar with the matter. Shares surged.
Carlos Slim, the Mexican billionaire, bought a 3.2 percent holding in Prisa through Inmobiliaria Carso SA last month. Prisa rallied as much as 9.8 percent before closing today 8.5 percent higher at 89 euro cents in Madrid in the biggest increase since Nov. 18.
“It is a great Christmas gift for the company given its high leverage,” said Francisco Salvador, a strategist at FGA/MG Valores in Madrid. “The company needs to keep restructuring its business, and this may not be the last refinancing.”
Media companies in Spain are struggling to halt a slide in earnings and market value as advertising revenue slumps with the country mired in its worst economic crisis in decades.
Prisa Chief Executive Officer Juan Luis Cebrian said in September he was confident to reach an agreement with lenders this year. On Dec. 19, Prisa said that “almost all” its creditor banks agreed on new debt terms.
Lenders will approve a refinancing until March 2014 subject to the conversion of some warrants held by investors into stock, said the people, who declined to be named because the negotiations are private. The signing of the refinancing is scheduled for next week, the people said.
The maturity of the loans may be extended until December 2014 if the Madrid company sells its 17 percent stake in Mediaset Espana Comunicacion SA, owner of Spain’s biggest commercial television station, or if it sells bonds, one of the people said. A spokeswoman for Prisa declined to comment and cited company policy in asking not to be named.
The margin of the refinanced loans will be 215 basis points, or 2.15 percentage points, above the euro-area interbank offered rate, or Euribor, compared with 200 on existing loans, one of the people said. The margin has a step up of 10 basis points in 2013 and another 10 basis points in 2014, according to one of the people.
Last year, Prisa got a debt extension until May 2013 and looser borrowing conditions, it said in statement. Prisa said in June it may sell nonstrategic assets valued at more than 500 million euros and issue nonbanking debt instruments for as much as 500 million euros, depending on market conditions.