Moncloa plans to demand from BlackRock protection of Naturgy, which is applied by IFM

technical services managing the foreign investment control system in Spainpermit or disapprove certain transactions for the purchase of strategic assets by foreign investors, they suggested that BlackRock’s purchase of GIP must pass this filter.

This is clear from the previous analysis carried out in recent days in the various departments involved in this verification system, which depends on Ministry of Industry and Economy and Moncloaamong the others.

Although the operation is currently announced and not completed, The Spanish government is now studying this corporate movement in detail to see what consequences it will have in the reorganization of the Naturgia capital.. This company is the first gas company in Spain and the third electric company. As such considered strategic for the security of Spain’s energy supply.

GIP, with a 20.6% stake, is the third largest investor. This is for La Caixa Groupwhich through Criteria controls 26.7%, and Rioja, a company created by CVC and Corporación Alba.which is 20.7%.

GIP ahead IF MWhat At the end of 2021, after a partial takeover offer, he acquired a 10% stake.

a percentage which was then increased by purchases on the open market. Last Thursday it was reported that it had already risen to 15.01%.

Exam for purchase of GIP by BlackRock It will be very tough, but blocking the operation is a priori excluded, sources close to this check indicate.

Estimated measurements

In any case, the government is analyzing the possibility introduce measures acceptable to BlackRock that would be equivalent or even identical to those imposed on IFM at the time. What is it about seek a balance so that Spain is not perceived by foreign investors as a country without control over strategic companies or just the opposite.: The fortress is tightly closed, not letting anyone through.

Staging

In addition, production per year since important pre-election events (Galicia, Basque Country or European Parliament), like the one used in IFM. After filing a partial takeover bid in January 2021, IFM had to wait several months until August of that year to receive government approval.about which I had to ask a lot.

The market was waiting because If the government did not approve the operation, it would create a very negative image among the international community.. The blockade of IFM, an Australian superannuation fund with established long-term prestige that is not opportunistic or a bargain hunter, would not be understood.

But If the government had allowed IFM to enter Naturgy without further ado, the executive would have been bombarded with criticism. To allow a foreign investor to become strong without any filters in the capital of a Spanish energy company just at the moment of maximum tension in electricity and gas prices. IFM also joined the company’s board of directors.

Third way

Finally, the government saved the situation by using a third way: approved IFM’s takeover bid but imposed a number of conditions that were reasonable enough not to scale back the operation.

There were eight of them. Firstly, it was established IF M commitment to “support public investment in projects related to energy transition in Spain that contribute to long-term value creation.”

This also made him “I do not support any proposals for the sale of assets be presented to the council or board this implies a loss of control over subsidiaries, which could jeopardize the normal functioning of energy transportation and distribution activities. and natural gas in Spain.”

The third condition was “maintaining the registered office and headquarters effective management and management of business in Spain.”

The fourth commitment was “Support the retention of a significant part of the group’s workforce in Spain.“. And the fifth “supports reasonable dividend policy this allows for investment policies related to the energy transition.”

The sixth condition was “to support external debt policy aimed at maintaining the company’s credit rating at investment grade and let me Debt ratios of regulated subsidiaries in Spain are no higher than those recommended by the Competition Authority (CNMC).” The seventh condition was “support dissemination of annual and semi-annual financial information to the market“and there was an eighth”does not support any proposals to exclude the company’s shares from trading on the Spanish stock exchanges“, with some exceptions.

Three or five years

All conditions are valid for five years, that is, until 2026, with the exception of stock market delisting, which expires after three years.that is, in 2024.

If applied to BlackRock same conditions or equivalent – five or three years prevalence – This would mean resuming Naturgy’s defense on key issues such as stock market delisting or dividend payments.

GIP and Naturgy’s disdain for BlackRock would be more serious than if it were made for IFM. would have disastrous consequences for Spain’s image in the eyes of the international investment communityas BlackRock is the first major private investor in the Spanish stock market.