SEPI Sociedad Estatal de Participaciones Industriales

It affects SEPI´s financing and its ability to raise funds

The Council of Ministers has authorized to send to the Parliament a Bill which amends the Act regarding the creation of certain public law entities, dated on January 10th, 1996.

The Bill introduces two important new features; on the one hand, the possibility that the state-owned holding company Sociedad Estatal de Participaciones Industriales (SEPI) could be financed through the General State Budget in case it might need to utilize funds which it is not capable of raising on its own; and on the other, and as a result of the above, the current legal prohibition for SEPI to receive contributions or guarantees from the Administration.

Besides, the debts incurred by this state-owned holding company for raising funds through the issue of fixed-income securities can enjoy before third parties the State´s guarantee, a guarantee which will be offered according to the same terms and conditions which apply to the obligations of The Treasury and up for the amount which might be stipulated by the General State Budget´s Law for each financial year. The maximum amount will refer, at all times, to SEPI´s current accumulated debt amount guaranteed by the State.

On the other hand, a corporate tool already in force through the Ley de Sociedades Anónimas (Public Limited Companies Act) and which applies to listed companies, is also applied to the mercantile companies included into the Grupo SEPI, as is that of the redeemable shares, through which it is sought the reinforcement of its equity resorting to the investment market and to finance its respective corporate and industrial adaptation processes without the State incurring in more expenses. Elimination of the requirement of having 1,200 Millions in equity.

The Bill eliminates the requirement imposed to the Sociedad Estatal de Participaciones Industriales of maintaining a minimum equity of 1,200 Million Euros, the minimum limit stipulated by the Royal Law-Decree of 1997 through which it was modified the Act for the creation of certain public law entities. In this way, the state-owned holding company will be capable of carrying out, in an efficient and agile way, the management of its assets, facilitating in this way the new corporate orientation given to the entity.

The legal structure of the current Sociedad Estatal de Participaciones Industriales, included in the above mentioned Act of 1996, answered, among others, to the goal of dissociating from the State General Budget both the amortization of the historical debt of the former INI and the financing of the restructuring processes before the privatizations, the reorganization of the state-owned companies and the contributions to the loss-making companies, or to those being restructured, financing those transactions with the resources raised through the privatizations. This goal enshrined in SEPI´s legal regime the general principle of financial autonomy, which was complemented with the legal requirement imposed on SEPI of maintaining an equity which could not be lower than 1,200 Million Euros, as is stipulated in the Law-Decree of 1997.

Eight years after the last significant modification carried out, the Sociedad Estatal de Participaciones Industriales has entered a new corporate phase in which the principle of budgetary autonomy cannot be maintained. That is why, always in keeping with the fullest respect to the Community Law, it is necessary to modify SEPI´s financial regime, which had been basically designed for the general privatization of the companies belonging to the Administration.