Spain Picks Goldman Sachs to Advise on Sale of Bankia Stake
Spain picked Goldman Sachs Group Inc. to advise on the sale of Bankia (BKIA), the lender whose collapse in 2012 pushed Spain into a European bank bailout, and agreed to pay the U.S. bank one euro ($1.37) in fees.
Goldman Sachs will analyze strategies for divesting the government’s stake in Bankia, the state bank restructuring fund, known as FROB, said in an e-mailed statement today. The investment bank, which previously worked on the government’s plan to recapitalize Bankia in 2012 and 2013, will charge 1 euro, said three people familiar with the information who asked not to be identified because the terms aren’t public.
Real estate-linked losses at the Bankia group helped push Spain into seeking a 41 billion-euro ($56.2 billion) bailout from Europe in 2012 as concern mounted that the cost of salvaging it and other former savings banks would overwhelm government finances. Bankia’s Chairman Jose Ignacio Goirigolzarri signaled earlier this month that the government was preparing to sell off its stake in the lender that was recapitalized with 22.4 billion euros of public funds and that the process may take more than two years.
A spokesman for Goldman Sachs in Madrid, who asked not to be identified in line with company policy, declined to comment on the fee structure for the transaction.
The bookrunners for the U.K. government’s sale of 3.2 billion pounds ($5.4 billion) of shares in Lloyds Banking Group Plc in September agreed to charge U.K. Financial Investments Ltd. no fees for the work, according to the National Audit Office. Bank of America Corp., JPMorgan Chase & Co. and UBS AG were joint bookrunners for that transaction.
The Bankia group, including its parent company BFA, on Feb. 3 posted after-tax profit of 818 million euros in 2013, as targeted in Goirigolzarri’s turnaround plan, compared with a loss of 21.2 billion euros in 2012.
Bankia also sold bonds last month in a sign of renewed favor with investors and its shares have gained 20 percent this year. The government owns about 68 percent of Bankia.
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