Sacyr has initiated an offer to buy back certain convertible bonds issued in April 2019 for a total of 175 million euros. The move aims to strengthen the balance sheet by reducing net debt through recourse, a strategy disclosed to the National Securities Exchange Commission.
Company sources indicate the goal of the operation is to lower volatility in Sacyr’s stock price in the market. The infrastructure group has issued these instruments to manage risk, with some investors taking short positions to hedge exposures. At present, bearish bets exceeding 0.5% of the capital have been registered with the Spanish regulator, reaching an overall short position of about 3.35%. Notable funds involved include GLG, LMR, Squarepoint, Syquant, and Sona.
The bond repurchase offer will be open from this Monday and run through November 9. The change will allow the convertible to be settled earlier and also shifts its expiration date, which is currently set for April 2024.
Bondholders have the option to receive consideration in stock, cash, or a mixture of both. Those who accept the offer may receive up to 35 million treasury shares, with an estimated market value around 98 million euros. In addition, incentives are offered to bondholders who participate in the offer, comprising 3,250 euros for every 100,000 euros of principal.
Reducing debt, a central pillar of the 2021-2025 Strategic Plan
A core objective of Sacyr’s 2021-2025 Strategic Plan is to bring recourse debt down to zero. The company currently reports net recourse debt of 661 million euros. Proceeds from the sale of service-focused subsidiaries Valoriza and Facilities are expected to contribute meaningfully to this reduction.
By the end of October, Valoriza was sold to Morgan Stanley for 420 million euros, with an enterprise value of 734 million euros including debt. At the same time, efforts continue to close the sale of the Sacyr Facilities subsidiary, following a purchase-sale agreement reached last July with Serveo as the buyer, a transaction valued at 87 million euros. In addition, Sacyr anticipates potential ancillary gains of up to 15 million euros depending on the outcome of several ongoing claims and contingencies.