Reuters reported today that BFA, the Spanish state owned banking group, has committed that it will spend up to Eur275 million or US$358 million on the acquisition of new shares to be released by subsidiary lender Bankia by May of this year. As part of a major recapitalization plan, Bankia will be issuing 11 billion shares which are set to begin trading by the 28th of May at Eur1.35 each.
In a regulatory filing, Bankia commented, "The objective of buying new Bankia shares is to raise our shareholding while providing liquidity in the market in the event of excessive sale orders or flow-back once the trading of new shares starts,"
In the succeeding weeks, once the capital increases from European Union funds is completed, BFA will have an estimated of sixty nine percent of Bankia while the rest is primarily owned by numerous ordinary Spaniards. Majority of the Spaniards were convinced to purchase shares in Bankia at its initial public offering in 2011 subsequent to its creation from a joint venture of a number of local savings banks.
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