catalan companies

The Barcelona-based nationalised Catalunya Banc has reached a first deal with unions on the announced mass lay-off. The deal includes voluntary redundancies instead of early retirements, and the possibility for 401 workers over 50 years old to leave the company. The agreement was reached in the early hours of Wednesday morning, after a long day of talks on Tuesday. Catalunya Banc runs the banking business of the nationalised savings bank CatalunyaCaixa, which will be sold in the coming months after a comprehensive restructuring process. Talks are still ongoing in order to close a definitive deal and the definitive agreement has now to be ratified by the bank’s Board.

In addition, CaixaBank declares that “it will take all the opportunities” to grow in the Spanish market. The Catalan CaixaBank, which is Spain’s main retail bank, has sold €1 billion in 3.5 year bonds, after a market demand of €2.8 billion. In fact, the large demand made the issue price drop from 180 to 170 basic points on ‘midswap’, which is the reference index for this sort of corporate bonds. The issue interest was set at 2.5% and the issue cost represents 18.5 basic points over the Spanish Treasury Debt’s price. The new issue by CaixaBank is part of the bank’s financial plan for 2013, which aims to strengthen CaixaBank’s liquidity, set to reach 64.604 billion by 30^th June.

Willie Walsh, the CEO of IAG – the group formed by British Airways and Iberia, guaranteed that its subsidiary airline Vueling will continue having Barcelona El Prat Airport as its main base if Catalonia becomes an independent country and even if it is forced to abandon the European Union. “We will continue in Barcelona”, he emphasised on Tuesday in a meeting with press reporters from the Chinese city of Chengdu, according to an article published by Barcelona-based newspaper La Vanguardia. Walsh was in China as British Airways was unveiling a new route linking this city with London.

The Catalan company has signed an agreement with the Shah Deniz consortium for a 25-year period. The Azerbaijani company will supply 1bcm of natural gas per year. The agreement is conditional on the final decision on the project investment, a step planned for later this year. The development of this project will open a new supply route to Europe through the ‘Southern Corridor’, which will allow Europe to access gas reserves in the Caspian Sea area. Barcelona-based Gas Natural Fenosa will receive the gas in facilities based in Italy, one end of the European gas pipeline passing through Georgia, Turkey, Greece, Albania, and crossing the Adriatic Sea. The Catalan company said that this supply will consolidate its presence and strengthen its gas supply business in Italy.

Barcelona-based Gas Natural Fenosa (GNF) has signed a contract with the South Korean company Kogas to supply between 1 and 1.5 bcm for the next two years. This is the first deal that Catalan GNF has signed with Kogas, the largest gas operator in South Korea and the biggest importer of LNG in the world. Furthermore, in recent months, GNF has signed contracts with companies in both Japan and India, contributing to its increase in the Asian market, which has a high growth potential in the coming years.  International sales now represent 30% of the total portfolio of the Catalan energy company.

The Board of Directors of Catalonia-based Banc Sabadell has approved a capital increase operation of €1.4 billion. The transaction will take place in the form of two consecutive increases in order to “strengthen capital and allow new important shareholders to join the bank aiming [to reinforce] the future internationalisation process of the bank”. The decision by Sabadell, Spain’s fifth largest bank, to carry out this operation was taken after finding out about the “growing interest” of international investors to acquire stable assets of the Catalan financial entity. It is expected that at least €1.33 billion will be attracted, which will subsequently make Banc Sabadell to one of the best capitalised banks in Europe with a core capital beyond 11%.

The Catalan bank was nationalised in 2012 and is going through an important restructuring process before being privatised again. Currently, the financial entity is owned by the FROB (Fund for Orderly Bank Restructuring), which is run by the Bank of Spain and the Spanish Government. The FROB has been delaying the auction to sell CatalunyaBanc and is now proposing to layoff 2,453 workers of the bank and its subsidiaries, according to trade unions. This would represent firing some 34% of its staff. The company is proposing a compensation of 20 days worth of salary per year worked for those it plans to layoff, following the labour market reform, with a maximum of the equivalent to 12 months salary being given. CatalunyaBanc ended the first half of 2013 with a net profit of €183 million, after having transferred part of its real estate toxic assets to the so-called “bad bank” SAREB.

In the last three years, 1,060 companies have moved their headquarters from Catalonia to the region of Madrid, according to a report published by Madrid’s regional Government. The report states that most of them took the decision because of the lower taxes that exist in Spain’s capital, compared to other areas such as Catalonia. Since 2010, 5,000 companies based in the rest of Spain decided to move to Madrid; 21.4% of them were from Catalonia. Paradoxically, 43 cents out of every euro paid in taxes in Catalonia is to pay for investments and services made in other parts of Spain, which turns into an annual fiscal deficit of 8.5% of Catalonia’s GDP, meaning that Catalans are obliged by the Spanish Government to give away €16.5 billion. Meanwhile, the Catalan Government is under-budgeted and obliged to implement severe budget cuts and raise taxes to balance the budget.

The airline group formed by British Airways and Iberia, IAG, announced it will buy up to 220 new Airbus 320 between 2015 and 2020, 120 of which will be for the recently-purchased Catalan company Vueling. IAG bought the Barcelona-based airline last spring and the operation was authorised in July by the competition authorities. Vueling is currently one of the few profitable airlines in Europe, with a business model evolving from a low-cost airline but offering business services and flying to the main airports in Europe. In fact, the company links Barcelona El Prat with 104 destinations (in Europe, the Middle-East, Russia and Africa) and it has operation bases in Madrid, Paris and Amsterdam, among others. Last July, Vueling increased its number of transported passengers by 18% and flights by 13% on July 2012 figures.

The multinational energy company has confirmed it will continue operating in Panama for at least 15 more years through its subsidiary companies Edernet and Edechi, which control 65% of the country’s electricity market, supplying more than 500,000 clients. Gas Natural Fenosa owns 51% of both Edernet and Edechi, while the rest of the shares are controlled by Panama’s Government. The Catalan multinational entered Panama in 1998. According to Gas Natural Fenosa, it has invested more than €400 million to strengthen the electric power network of the Central American country and it foresees an additional investment of €230 million within the next 4 years.

The solvency ratio stood at 10.21% of the bank’s total resources, with 9.77% of core capital. Barcelona-based CatalunyaCaixa closed the first half of 2013 with a net profit of €183 million, which have met targets to recapitalise the bank. The interest margin reached €264 million, which represents a reduction of 5.9% as a result of a credit transfer to the publicly-owned banking management company Sareb. In spite of this, the reduction is less than the average decline seen in the sector as a whole and it has seen a remarkable growth during the first half of 2012 of 14.8%.

Abertis has reported that they have sold London Luton Airport to a consortium made up of publicly-owned Spanish Airport Authority (AENA) – which will own 51% - and Axa Private Equity (49%). The deal is said to be worth €502 million. It was estimated that the asset would have brought in €141 million to the company’s revenue and €46 million to the EBITDA for 2013. The transaction is currently pending approval from the competition authorities, the Spanish Government and Luton Borough Council.  It is part of Abertis’s strategy to modify its portfolio in order to optimise its asset base. Abertis reported last week that it has also made an agreement with ACN & HAS Airports Worldwide for the sale of Stockholm Skavsta and Belfast International airports.

The Catalan pharmaceutical company posted a net profit of €182.2 million between January and June 2013, which represents an increase of 36.9% on the same period of 2012. 92.1% of Grífols sales are made abroad and this figure has reached €1.27 billion, up from 6.2% on the first half of last year. Total turnover stood at €1.38 billion, a 4.9% increase. Furthermore, between April and June, the multinational based in Greater Barcelona obtained its highest ever quarterly sales in absolute terms, which reached €697.1 million and represented a 7.2% increase on the same period of 2012. Last year, Grífols bought out its main competitor in the US, Telecaris, which made the Catalan company one of the main pharmaceutical companies in North America, particularly in the blood-derivate products.

The real estate subsidiary of Catalonia’s second largest financial entity, Solvia, increased sales by 56% compared to last year’s same period. The company posted its provisional results for the first half of the year, although it has decided to extend its seasonal sales campaign until the 15^th of August due to the high demand. Banc Sabadell made €1.27 billion from the sale of 7,747 properties. The forecast for the whole year is to sell 16,000 properties. Statistics released by the bank show that 15% of buyers are non-resident foreigners while 33% purchase to invest.

Barcelona’s Chamber of Commerce has presented the results of the economic situation of Catalonia during the second quarter of the year. It is estimated that GDP rose by 0.1% on the second quarter, following 18 months of negative growth. President of the Chamber, Miquel Valls, attributes this increase to a new economic model based upon high levels of tourism and exportation, which has boosted activity in the industrial sector. Regarding outlook for the third quarter, the Chamber expects this growth to continue which will improve the business climate within Catalonia.