Spain's Bankia eyes 3.65 billion euro IPO

 

Spanish savings bank Bankia has set an indicative price range for its initial public offering to raise around 3.65 billion euros, pushing ahead in the face of tough market conditions, sources said on Wednesday.

Spain's biggest savings bank, formed from the merger of seven regional banks, has set its price range for the flotation at 0.46 to 0.51 times book value and aims to start trade on July 18, sources close to the situation said.

The IPO prospectus is with the regulator awaiting final approval and is expected to be published later on Wednesday, sources said.

Bankia declined to comment.

Bankia must raise the capital to meet strict new solvency levels set by the Bank of Spain.

A smooth stock market listing of Bankia is seen as a gauge of the success of Spain's banking sector overhaul, started earlier this year by a government seeking to reassure markets about the stability of the country's financial system.

Greece's struggles to restructure its debt from a international bailout one year ago have reignited fears about Spain's ability to reduce its deficit and have lessened investor appetite for the euro zone's fourth largest economy.

Spanish malaise aside, market uncertainty has hit new listings in Europe this year with many deals pulled and others performing poorly after their flotations. This has lead to burned investors demanding bigger discounts.