The Spanish state has initiated the process of reprivatizing Bankia, the bank that needed to be nationalized in 2012 after coming unstuck due to its exposure to the floundering real estate market and had to be bailed out with a massive injection of taxpayers' money.
In a statement filed with the National Securities Commission (CNMV), the banks appointed to carry out the operation, Deutsche Bank, Morgan Stanley and UBS, said they would arrange the sale of a 7.5-percent stake in Bankia, or 863.8 million shares, to institutional investors through an accelerated bookbuilding process, which will be completed in a day.
The state Orderly Bank Restructuring Fund (FROB) has a 68.4-percent stake in Bankia through the bank's parent group, Banco Financiero y de Ahorros (BFA).
Bankia's shares closed Thursday at 1.58 euros, giving it a market capitalization of some 18.2 billion euros, with the 7.5-percent tranche worth 1.365 billion. The bank's shares have put on some 28.5 percent this year.
The FROB plans to gradually sell off its stake in Bankia this year but will retain 50.1 percent for now. The idea is to follow a similar strategy as the US government with insurer AIG, which received 182.7 billion dollars in state funding and was totally privatized for 22.7 billion.
Bankia received an injection of taxpayers' money of 22.424 billion euros. Experts calculate that for the state to completely recover its money, Bankia would have to be sold at an average price of 2.8 euros per share.
BFA/Bankia made a profit of 2.171 billion euros last year after posting a loss of 21.236 billion in 2010, the biggest-ever blowout in Spanish corporate history.