Sacyr Vallehermoso SA (SYV), the Spanish builder that owns a 10 percent stake in Repsol SA (REP), plans to remain a “loyal” shareholder of the oil company, Sacyr Chairman and Chief Executive Officer Manuel Manrique said.
Sacyr supports Repsol’s development plans and is “optimistic” about its future, Manrique told reporters at his company’s headquarters in Madrid today. Argentina seized control of Repsol’s 51 percent stake in YPF SA (YPFD), that nation’s largest oil producer, in April.
“We fully support Repsol’s strategic and future plans,” Manrique said. “The dividend we are paid from the stake continues to be good enough in order to meet debt requirements. We plan to be loyal to Repsol while our priority is to improve our balance sheet.”
Fitch Ratings on June 8 cut Madrid-based Repsol’s credit rating and gave it a negative outlook because of “uncertainty” about execution of the company’s strategic plan. Repsol cut its dividend payout ratio last month and said it would increase oil production outside of Argentina 7 percent a year.
Repsol bought 10 percent of its own shares from Sacyr last year for about $3.35 billion, helping the construction company repay about half of a syndicated loan. Sacyr is the largest shareholder in Repsol after CaixaBank (CABK), according to data compiled by Bloomberg.
Sacyr will continue to sell assets, Manrique said. Sacyr is also boosting its international sales as Spain’s government carries out austerity measures to tackle the budget deficit.
Sacyr won a 35 million-euro ($44.5 million) contract for work on Sao Paulo’s metro and contracts in Angola valued at about 125 million euros, Manrique said. The company has been paid about 300 million euros of debt owed by Spanish regions and expects to receive payments for the remaining 70 million euros this year, the executive said.
Sacyr fell 1 percent to close at 1.42 euros. The shares have dropped 64 percent this year, the second-worst performer on Spain’s benchmark IBEX 35 Index. Repsol has declined 46 percent.
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