Spain’s BMN Plans to Sell Shares Next Year to Pay Back State Aid

Banco Mare Nostrum SA, a lender rescued in Spain’s European-funded bank bailout, plans to start selling shares as soon as next year as it begins the process of paying back state aid, Chairman Carlos Egea said.

BMN will bring forward the sale of shares instead of waiting until a European Union deadline to hold a public offering before the end of 2017 expires, Egea said in a speech at a banking seminar in Madrid today.

The lender, formed from the merger of three savings banks, was nationalized last year and provided with 730 million euros ($1 billion) of capital in return for commitments to shrink and sell assets in preparation for a share sale before 2018. Spain’s state bank rescue fund, known as FROB, owns 65 percent of Madrid-based BMN.

“We will substitute the public capital of the FROB for private capital,” Egea said. “We are going to return all the public aid.”

Spain in February sold 7.5 percent of Bankia SA for 1.3 billion euros as it started to recover 22.4 billion euros of funds provided to recapitalize a bank whose near-collapse in 2012 pressed the country to seek 41 billion euros of European aid to prop up failing lenders.

Before it's here, it's on the Bloomberg Terminal.