Two Mexican investors, Prodi Group and Mota-Engil Mexico, are moving to participate in separate capital increases in February by providing a 90 million euro loan to Duro Felguera, with the objective of becoming reference shareholders. They completed their loan payments this Monday and agreed to advance support for Asturian engineering in exchange for an equivalent stake. On October 31, they distributed 30 million euros (one third of the total) and announced that the remaining 60 million euros would be donated before December 5, which subsequently occurred.
The second phase of the operation envisions turning these contributions into equity. The Mexican groups would thus become reference shareholders of the company through the exchange of loans for shares, in two successive capital increases that were planned and authorized by the general meeting of shareholders on April 13.
Converting loans into equity requires that the National Securities Market Commission (CNMV), the regulatory body for the Spanish stock market, grants exemptions to the two Mexican investors from launching a 100% takeover bid for Duro Felguera. In Spain, shareholders with more than 30% control are typically required to launch a public offer, as would be the case here. The two investors anticipate exceptions and have been pursuing CNMV exemptions, as outlined in agreements reached with Asturian engineering about ten months prior.
Here is the outlook from the two North American groups and Duro Felguera: existing shareholders will remain in the company, even though the new capital injections will dilute their stake. The first capital increase will be partially shielded, with some details to be disclosed as the process unfolds.
The 90 million euro loan represents a critical backstop for Duro Felguera, a company that required a bailout by the national government through SEPI in 2021. The infusion signals confidence from the Principality and creditor banks, as well as from Prodi and Mota Engil, in providing capital to support the Asturian firm’s relaunch. The entry of new shareholders is tied to a temporary rescue program backed by the state and the demand from lending banks.
The first capital increase would amount to just over 39.83 million euros and could be offered on a preferential basis to Duro Felguera’s 14,000 existing shareholders. The remaining portion would be acquired by Mota-Engil México up to a 24% control threshold in the Asturian company. The second increase, targeting a total around 90 million euros, would be subscribed by the Prodi group through the capitalization of the loan previously extended to Duro Felguera, matching the portion of Mota-Engil’s loan that was not repaid in the first phase. Taken together, this operation could push Prodi’s stake to 31% and progressively raise the combined stake to the 55% range by the end of the two stages, depending on the exact share tallies after each round. This arrangement positions the Mexican alliance to control a significant minority stake in the Asturian firm as the capital plan unfolds.
Duro Felguera has stated that the arrival of new shareholders would strengthen solvency, improve liquidity, and increase access to bank guarantees that enable growth and the pursuit of new contracts.