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Spain to take 65% stake in Banco BMN

Source: Reuters - Tue 19th Feb 2013
Spain to take 65% stake in Banco BMN

The Spanish authorities will take a majority stake of 65% in small, unlisted lender BMN after a cash injection and the conversion of preference shares into capital, a source with direct knowledge of the operation said on Monday.

In a statement to the Spanish stock exchange regulator released earlier on Monday, BMN had said the country's bank restructuring fund FROB would convert into capital €915 million in preference shares as well as fully subscribe a capital increase of €730 million.

The source said the operation would give the FROB a controlling stake of 65% in the bank while the remaining 35% would be owned by savings banks Caja Murcia, Caja Granada and Sa Nostra, which formed BMN in 2010.

The bank declined to comment on the matter.

The FROB currently controls three other Spanish lenders - Bankia, Catalunya Banc and NCG Banco - and it recently sold off Banco de Valencia to CaixaBank.

As a condition for receiving €40 billion in European money to prop up a banking sector brought low by the end of a decade-long property bubble 5 years ago, Spain has committed to have BMN listed by 2017.