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George Soros takes stake in debt-laden construction firm FCC

Financier joins Bill Gates among builder’s shareholders

Billionaire financier and philanthropist George Soros has bought a 3-percent stake in heavily indebted Spanish construction firm FCC from the group’s founding family. Last week, Esther Koplowitz, whose father founded the company, sold 3.8 percent of her majority stake for 15 euros a share, amounting to 72 million euros. Soros is the second internationally renowned investor to take a stake in the company in recent months, following Microsoft founder Bill Gates’ purchase in October of nearly 6 percent.

FCC registered losses of 675 million euros ($923 million) in the nine months to September.

Esther Koplowitz, who inherited the firm from her father, now owns 50.01 percent of FCC. The sale is part of a debt-refinancing deal organized by B-1998, the company through which Koplowitz controls FCC, and which includes the Aguinaga family and Bodegas Faustino, each of which have 5 percent. The deal included the sale of these shares.

Bill Gates is now the second-biggest shareholder in FCC. The Microsoft founder bought 5.7 percent in October for 113 million euros, paying 14.85 euros a share.

FCC is currently refinancing some 5 billion euros of debt, the bulk of the 6.6 billion euros it had accumulated by September.

As the world, and Spain in particular, has faced financial troubles and a downturn in construction activity, the company has suffered and its share price has dipped. This year FCC faced restructuring of some $2 billion in debt as well as the restructuring and refinancing of its subsidiary Alpine in Europe. Early this year, there were rumors that Guggenheim Partners might inject equity, but no deal was announced. This all means Gates could be getting quite the bargain, presuming the price will eventually bounce back.

FCC has operations in 56 countries, according to its latest financial report. It is building the new, 6-billion-euro Riyadh metro, to be the longest subway in the world at 176 kilometers, and Central America’s first subway, a 1.1-billion-euro project in Panama. Other projects include a $650-million replacement for a failed bridge in Long Beach, California, as well as a hospital outside Belfast inaugurated by Queen Elizabeth II last year.