Spain missed the ‘boom’ of 2020 due to political instability and the impact of Covid, but operations are reactivated and several companies prepare their jump to the park
Spain missed the boom of IPOs that 2020 represented in the markets in general. The country lagged behind at the European and global level due to the impact of the coronavirus and the uncertainty politics and internal law, but the arrival of vaccines and European funds has reactivated the interest of companies and investors in the premieres in the park and there are at least half a dozen Spanish companies that are finishing their debut in 2021.
Soccer Clubs, Renewable Energy Companies, and Hotline (which is becoming a classic in these pools) are some of the names at stake if the pandemic and volatility allow it.
If it materializes, it would break a streak of several years of drought in the Spanish markets. In 2020, only Soltec dared to make the leap to the Continuous Market and although there were more movements in the BME Growth segment (a new name for the traditional MAB), the volume of exits in Spain fell by 30%, to 221 million dollars, according to the report IPO Report 2020 the Baker McKenzie.
It was one of the few countries that ended up with a negative balance. The economic impact of the pandemic was the final blow to a trend that had been taking place here for a couple of years, largely due to political instability. The repetition of elections due to the impossibility of forming a Government, the difficulties to achieve a Budget agreement, and the legal insecurity in some sectors blurred the stock market scenario and woke up the misgivings from companies and investors. Many operations, in fact, were cut short pending a more favorable outlook.
Now there is still tension between the Government partners, the renewal of the CJPG is blocked, the future Housing Law stuck and several tax figures have come into force, however, the arrival of vaccines against Covid, the abundant liquidity available in the markets, and the manna promised in the form of European funds have caused Spanish companies to re-interest themselves in seeking equity financing to overcome the economic ravages of the pandemic.
“The outlook for this year is very positive. We have been observing during the first half of 2021 that there is a very significant number of operations underway, with the renewable energy sector at the forefront, and a growing interest in exits to the stock market as a method of financing and divestment “, he points out Carlos MartÃn, director of the Mercantile and Capital Markets team at Baker McKenzie.
According to their analysis, there is a “rebound effect in the number of operations after a particular 2020, in which there was great uncertainty, especially in Spain”, explains Carlos MartÃn. On the other hand, he believes that at this time companies want to take advantage of “the spring placement window, which is one of the most common in IPO operations.”
One of the firms best positioned to take advantage of this window is Línea Directa, Bankinter’s insurance subsidiary, which approved its debut in the markets at the 2020 meeting but has been delaying it since then. Now, as the bank’s CEO has recognized, Maria Dolores Dancausa, the premiere faces its final stretch and points to April 21 as the date marked on the calendar. According to his words in a recent interview for Cinco Días, the only thing missing is the relevant authorization from the European Central Bank (ECB), which is finalizing it.
But there is more. In fact, 2021 could be a historic year because, for the first time, the stock market debut of a Spanish football club could materialize. Its about Intercity Football Club, a Third Division team from Alicante that is also in the process of a possible exit. The team has already received authorization from the Higher Sports Council to become a Sports Limited Company, an essential requirement to complete the process, and spring is also its time horizon (although not definitive).
Restoration, which in recent years has been one of the most active areas in terms of IPOs in Spain, has been completely stopped by the impact of Covid-19 in the sector, such as and how does it aim Rosa Maria Orozco, partner responsible for IPO in EY. “And the same happens in other sectors such as tourism or hotels, which have been particularly hit by the pandemic,” he adds. By contrast, companies with a industrial and technological profile they could be candidates to star in future premieres in the park in our country.
However, if there is a sector that this year bets on the price as a means of financing, it is the renewable energies. A good part of the premieres of the last few years have been carried out by companies of this segment, as they prove Solaria, Solarpack and Greenenergy, and in 2021 the wake could be prolonged to the heat of the appetite of the investors for this market and the impulse of the European funds.
“Spain is a benchmark in the sector, there is a lot of interest on the part of investors and a large part of the European aid is aimed at a greener economy, so they have several incentives in their favor “explains Rosa María Orozco.
Capital Energy is one of the firms involved in the project preparation process, as well as Opdenergy, although the most important operations in this sector have two proper names: Acciona and Repsol.
The first prepares the debut on the Stock Market of its renewable division, Acciona Renewable Energy Corporation. The company’s board of directors approved the move a few days ago with the aim of “giving greater visibility to its strategic business lines, reducing its capital costs and strengthening its balance sheet.”
The second -Repsol- it is also studying the possible IPO of its renewable energy subsidiary. The company has hired JP Morgan to study the transaction and, if completed, it could become the largest premiere in the Spanish market in 2021 with a value of more than 3,000 million euros.