Bankia Falls on Ejection From Spain’s Market Index: Madrid Mover
Bankia Falls on Ejection From Spain’s Market Index
Bankia SA (BKIA), the lender that received the biggest Spanish bailout, fell as much as 34 percent after saying it would be ejected from the nation’s main stock index.
Shares in the Valencia, Spain-based lender traded 25 percent lower at 0.41 euros at 12.22 p.m. in Madrid, giving it a market value of 820 million euros ($1 billion). Bankia said in a filing last night that it would leave the IBEX 25 on Jan. 2 after the index committee took “special measures” due to its recapitalization.
Bankia, formed in 2010 from the merger of seven Spanish savings banks and listed on the stock exchange in July last year at a price of 3.75 euros, has plunged in value after losses linked to real estate led it to take 18 billion euros of European funds to clean up its balance sheet.
In a first stage of its recapitalization, Bankia will issue 10.7 billion euros in contingent convertible bonds to be bought by its parent company that will convert into ordinary shares next year as part of a capital reduction. Spain’s bank rescue fund, known as FROB, said the aim of the process is to make shareholders the first to bear losses linked to Bankia group’s restructuring.
To contact the reporter on this story: Charles Penty in Madrid at
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To contact the editor responsible for this story: Frank Connelly at
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