Spain Business
Spain Business Brief - Friday March 28 2008
By h.b. - Mar 28, 2008 - 9:57 AM
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The ongoing real estate crisis in Spain, and the continuing increases in the price of crude oil are being blamed in a 27.5% reduction in the state Budget surplus over the first two months of the year. The reduction in the amount of VAT being collected by the government because of the lower number of real estate sales has been estimated at 8%. The current surplus is 9.381 billion €.
Meanwhile real estate promoters association in Madrid, Asprima, have predicted an 8% fall in house prices in the capital this year. They say the greatest problem for the companies is what they described as the ‘strangulation’ caused by a shortage of cash. They consider that the industry is in for two difficult years and that 600,000 jobs will be lost over that time.
Seat has announced a surprise net profit of 170 million. It comes as hopes are on the rise for the manufacture of a new four wheel drive vehicle at Martorell, Barcelona.
The Prosecutors’ Office and those affected by the Gescartera fraud have welcomed the sentences handed down against the owner Antonio Camacho and others in the company yesterday. Camacho has been ordered to prison immediately and could face five years inside. The fund manager collapsed owing 87.99 million €. La Caixa and Caja Madrid have been ordered to cover the money shortage, but both have said they will appeal against the judgement.
Caixa Catalunya has sold off 4% of its share capital in Abertis. The savings bank was until now the third largest shareholder in Albertis and thus reduces its shareholding from 5.69% to 1.69%. The move is being described as a strategic one.
The Longstock Financial investment fund has offered the SAS Scandinavian airlines 450 million € for Spanair. It comes after Gadair pulled out of the deal. The Portuguese investment fund has said its latest offer is backed by foreign banks.
And in these days of problems in obtaining credit, Santander has entered into the consumer credit market in both the UK and Finland. The bank, presided by Emilio Botín, has reached the basis of an agreement with General Electric for the exchange of shares worth 1 billion €, underwhich GE Commerical Finance will acquire Interbanca from Santander.
German energy group E.ON will have to pay 13.525 billion € for Viesgo and the shares in Endesa. It’s part of the agreement reached between Enel and Acciona in 2007 and includes the contract to produce nuclear energy for the next ten years. Viesgo is a subsidiary of Enel in Spain.
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