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World's second richest man takes 25% stake in FCC

Carlos Slim, one of the world’s richest men, has invested €650m (£515m) in Spanish construction giant FCC, taking a 25.6 per cent stake in the company.

FCC majority shareholder Esther Koplowitz held 50.02 per cent of the group through her B-1998 company.

B-1998 has now reached an agreement with Control Empresarial de Capitales SA de CV, controlled by the family of Carlos Slim, who according to Forbes Magazine was the world’s richest man between 2009 and 2013, for Mr Slim to take a 25.6 per cent stake in FCC.

Mr Slim has invested approximately €500m (£396m) in shares and a further €150m (£118m) on subscription rights.

The deal comes after FCC approved a capital increase of €1bn (£799mn) last week, in an attempt to strengthen capital, reduce debt and improve group results.

In a presentation to shareholders, the group’s chief operating officer Juan Bejar said that the capital increase would make the group “an attractive business prospect for national and international investors”. The capital will be an increase against shareholder cash contributions.

The majority of the funds will be used to pay off a section of the group’s debt, amounting to €1.39bn (£1.08bn). The interest on the remaining debt will then be reduced from 13.5 per cent to 5 per cent, resulting in a €160m (£127.9m) reduction in interest.

A key aim of the capital increase is to elevate FCC’s shares liquidity in the market, and to reduce the group’s financial leverage and to boost net earnings, according to its presentation to shareholders.

The group will focus on strengthening its position in environmental services and water in current markets, and will look to expand into new markets.

For construction, a spokesman for the group said it would “sustain a selective presence in the most profitable projects for our construction area”.

The group also highlighted its results for the nine months to October 2014, showing that construction revenues were up 9 per cent in Europe compared to the same period in 2013, but revenues for construction in the group’s home market of Spain have plummeted by 27 per cent in the same period.

Overall, the construction arm of the group’s revenues fell by 20.4 per cent compared to the same period a year earlier. Revenue for the past nine months stood at €1.44bn (£1.15bn).

The group’s environmental services arm in the UK also saw revenue growth, with revenue increased by 8.6 per cent compared to the same period a year earlier.

Among FCC’s UK schemes is the £600m Mersey Gateway development, where it is in a consortium with Kier and Samsung C&T Corporation.

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