France sells shares in Paris airport company

Sunday, June 30th, 2013 | Finance News

PARIS (AP) — The French Finance Ministry says it's sold nearly 9.5 million shares in state-controlled airport operator Aeroports de Paris in a move to raise proceeds to help boost the ailing economy.

In a statement Sunday, the ministry says it raised a total of 738 million euros ($960 million) via the sale of shares to two different investors.

French insurer Credit Agricole/Predica bought just over half of the shares, and now owns 4.81 percent of the company, which runs Paris' two main airports, Roissy-Charles de Gaulle and Orly.

French construction giant Vinci bought the remaining shares and now has a 4.69 percent stake in Aeroports de Paris. The government retains a 50.63 percent stake.

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Schmolz+Bickenbach chairman throws in the towel: paper

Sunday, June 30th, 2013 | Finance News

ZURICH (Reuters) - Swiss steelmaker Schmolz+Bickenbach's chairman acknowledged that Russian tycoon Viktor Vekselberg had won a long-running power struggle over the indebted firm, in a statement published in a newspaper on Sunday.

"There will be a new general meeting and a new board of directors with (Vekselberg's) Renova as dominating shareholder. I will be gone then," Chairman Hans-Rudolf Zehnder told Swiss newspaper Schweiz am Sonntag.

Schmolz+Bickenbach could not immediately be reached for comment.

Vekselberg, through investment vehicle Renova, acquired a 20.46 percent stake in Schmolz+Bickenbach on Friday from the group Schmolz+Bickenbach GmbH & Co KG (S+B KG), descendents of the company's founders who have been fighting with the board of directors over a restructuring for months.

Renova and S+B KG now hold a combined stake of 40.46 percent, which forces Vekselberg under Swiss law to submit an offer to buy the remaining shares in Schmolz+Bickenbach. Renova said it did not want to increase its stake further and hoped existing shareholders would keep their shares.

S+B KG said on Saturday the commercial registry office in Lucerne had granted its request to block any new entries to the steelmaker's share register with regard to decisions taken at Friday's shareholder meeting.

That means the board of directors and re-elected chairman Zehnder will not be able to execute a 330 million Swiss franc ($348.8 million) rights issue approved by shareholders on Friday.

Another major shareholder in Schmolz+Bickenbach, board member Gerold Buettiker's Gebuka, had obtained a court order ahead of the shareholder meeting, allowing S+B KG to only vote with 20.46 percent of shares instead of the 40.46 percent it owned at the time because the remaining 20 percent are tied into a shareholders' agreement with Gebuka.

S+B KG said the fact it could only vote with about half of its shares had a decisive influence on the outcome of the shareholders' votes on Friday.

($1 = 0.9462 Swiss francs)

(Reporting by Silke Koltrowitz; editing by Jane Baird)

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Spain lenders brace for tough year-end as new rules bite

Sunday, June 30th, 2013 | Finance News

By Julien Toyer

MADRID (Reuters) - Spanish lenders are bracing for lower profits and dividends and a tougher funding environment under new rules meant to prepare them for pan-European supervision next year and avoid a repeat of last year's multi-billion-euro bailout.

On Thursday, the Bank of Spain urged lenders to cap cash payouts to shareholders to the equivalent of 25 percent of profit and to be cautious on dividends paid in shares.

That came hard on the heels of another recommendation from the central bank to calculate the impact of removing minimum interest rate clauses on residential mortgages, a move that would lower payments for homemakers but hit bank profit.

Also a long-awaited European deal on how to distribute the cost of bank rescues hit share prices last week of some banks in the region's weaker countries, including Spain, on fears they could find it harder to attract funding.

Three banking sources said the new rules did not bode well for the second half of the year because they left investors with the impression that banks had not been fully cleaned up and that more measures were still to come.

"The new guidelines on dividends introduce more uncertainty in a sector which already registers high levels of insecurity at a time when the volume of additional provisions that banks will need to book is still unknown," said one of the banking sources, who declined to be named.

Lenders had already been asked by the Bank of Spain to review by September their 208 billion euros ($270.5 billion) in portfolios of refinanced loans.

Economy Minister Luis de Guindos said lenders would probably have to book another 10 billion euros in provisions to cover potential losses on those loans and seek 2 billion euros in fresh capital once the review is complete.

This would add to the more than 80 billion euros booked last year, which hit profit across the board, forced some lenders to scrap dividend payments or raise new funds on the stock and bond markets and prompted the government to seek 42 billion euros from the European Union to recapitalize the weakest ones.

HEADWINDS?

The massive write downs and the European-financed bailout have partly restored confidence in the Spanish financial system after it was devastated five years ago when a decade-long property bubble burst.

The rescue has so far failed to reactivate bank lending to Spanish companies and households, while the rate of non-performing loans continues to rise.

The banking source said the latest guidelines on dividends were dictated by the International Monetary Fund, which earlier in June called on Spanish lenders to reinforce the quantity and quality of their capital by being prudent on cash dividends.

The source also said the Bank of Spain wanted all Spanish lenders to be fully cleaned up and well capitalized before pan-European stress tests next year.

In the short term, however, banks such as Popular and Sabadell , which did not need public aid last year, may face headwinds.

Both have high levels of refinanced loans, have heavily used clauses in mortgage contracts that set floors on interest rates and may find it more difficult to fund themselves under the new EU regime, which mean that second-tier banks in the periphery of the euro zone are likely to have to pay a premium to attract equity and debt investors.

The new guidelines may make it hard for them to stick to their dividend plans for 2013, analysts say.

They also say that other banks that have ridden out Spain's crisis until now, including Spain's three-biggest lenders Santander , BBVA and Caixabank as well as Bankinter , may have to adapt for different reasons.

"Santander and Caixabank dividends per share are probably too high. Bankinter probably needs to adjust downwards its cash dividend per share because payout exceeds 25 percent ... BBVA could move to more scrips (dividends paid in shares)," Carlos Garcia Gonzalez, an analyst at Societe Generale, wrote on Friday in a note to clients.

State-owned banks including Bankia are not safer. Although they already had a ban on dividends until 2014, the three other regulations may weigh on the capacity of the government to apply their restructuring plans and quickly sell them, analysts say.

($1 = 0.7691 euros)

(Additional reporting by Jesus Aguado; editing by Fiona Ortiz and Jane Baird)

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