Spanish state sells 7.5 percent of nationalized Bankia for 1.304 billion euros

The Spanish state on Friday took in 1.304 billion euros from the sale of a 7.5-percent stake in nationalized bank Bankia, recouping a small part of the 22.424 billion euros in taxpayers’ money injected into the lender to keep it afloat after it collapsed under the weight of the languishing real estate sector.

The state Orderly Bank Restructuring Fund (FROB), which fully owns Bankia’s parent, Banco Financiero y de Ahorros (BFA), sold 863.799 million Bankia shares at a price of 1.51 euros per share, a 4.4-percent discount to the closing price on Thursday. “Such a discount is normal in transactions of this kind and smaller than the discounts seen in similar recent transactions,” Bankia said in a statement.

The shares were sold to institutional investors through a so-called accelerated bookbuilding process. Demand for the placement amounted to over 2.5 billion euros. UBS, Morgan Stanley and Deutsche Bank acted as bookrunners for the placement.

Through BFA, the FROB had a stake of 68.4 percent in Bankia prior to Friday’s sale and now owns 60.9 percent. It plans to gradually sell off further stakes in the bank this year to reduce its holding to 50.01 percent.

Bankia said on the basis of the fact the BFA injected 10.620 billion euros of capital into Bankia in May of last year at a price of 1.35 euros, the sale of the 7.5-percent stake generated a return of 12 percent on that price and a net gain for BFA of 301 million euros.

Since the start of this year, Bankia’s share price has risen 28.5 percent. In order for the state to fully recover the injection it made into the bank, it would have to sell its holding at an average price of 2.8 euros per share.