The government-backed holding company SEPI is moving forward with what could be the largest rescue operation it has approved under its Covid-era fund. The publicly traded SEPI, which oversees the fund created to safeguard strategic businesses during the pandemic, has reportedly validated the rescue plan for the Catalan steel producer Celsa. In mid-2020, Celsa sought aid of 550 million euros. As reported by Expansión and corroborated by El Periódico de Catalunya, a member of the same media group, the bailout appears to function as the mechanism directing aid to other firms such as Air Europa, plus several entities from the Aviansa and other industrial groups following the Barcelona-based and spherical merger. (citation: Expansión; El Periódico de Catalunya)
The breakdown shows that of the 550 million euros initially allocated to Celsa, a little over half, about 280.5 million euros, would be provided as a participation loan, while the remaining roughly 270 million euros would be granted as a conventional loan. Regardless, the transaction still requires formal approval from the fund’s board of directors and is contingent on the consent of the company’s creditors. (citation: Expansión; El Periódico de Catalunya)
Creditors that hold the company’s debt include prominent financial institutions with a significant footprint in Spain, such as Castellbisbal-based entities and banks like Goldman Sachs, GoldenTree, TransOceanic, Morgan Chase, and Deutsche Bank, among others. The group carries more than 2,000 million euros in Spain and reported a turnover near 5.3 billion euros for 2021. (citation: Europa Press)
Because the participation loan exceeds the 250 million euro threshold, the operation also engages the European Commission and the Council of Ministers for approval. In principle, officials expect no major issues since the steelmaker’s headquarters would stay in Spain and the workforce would be preserved. (citation: Europa Press)
If confirmed, the Celsa operation would become the largest use of SEPI’s fund, which totals 10,000 million euros and is designed to bolster the commercial solvency of non-financial firms affected by covid. The government initially framed the fund as regional in scope and not burdened by pre-pandemic problems. To date, the mechanism has distributed just over 2,000 million euros, well short of the 5,300 million claimed. (citation: Europa Press)
As of now, the program has already disbursed substantial sums to several major players, with Air Europa receiving about 475 million euros and other large injections including 320 million euros for a company linked to the Avianca and Barceló groups, and 241 million euros to the Hotusa hotel group. In addition, a number of hotels have joined the roster, bringing the total count of assisted entities to about 21. Some notable mentions include Hesperia with 55 million euros, Abba with 30 million, Julia with 38 million, and Mediterraneán with 28 million. Several of these approvals occurred in the most recent cabinet session. (citation: Europa Press)