IAG Share Price: Bankia Sells Stake in British Airways’ Owner

on Jun 27, 2013

iNVEZZ.com Thursday, June 27th: IAG’s share price (LON:IAG) dropped by 2.3 percent to 263.00p on the London opening bell today after Spanish nationalised lender Bankia said that it had sold its 12.1 percent stake in the company that owns British Airways and Iberia.

Bankia yesterday said in a press release that it had hired Bank of America Merrill Lynch and in-house broker Bankia Bolsa to help sell its shares in International Consolidated Airlines as part of a wider plan to pay back taxpayer money used to bail-out the loss-making bank last year. “This plan stipulates, among other things, the divestment of non-strategic units, including the portfolio of holdings,” Bankia said.

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Bankia Bolsa said today that it had placed 224.3 million IAG shares at 256p each. The price is valuing the
transaction at ₤574.2 million.
Willie Walsh, chief executive of IAG, said earlier this year there was no longer any strategic value in having the bank as an investor, and he predicted Bankia would sell its stake in order to focus on its core business.

The sudden disposal of Bankia’s IAG stake and the fact that the shares were offered to the public ended the possibility that the IAG holding would be bought up by a strategic partner. Earlier this year Qatar informally expressed interest in taking over Bankia’s interest in IAG.
**British Airways Issues $927 Million Bonds**
British Airways has launched a $927 million (₤604.6 million) publicly traded bond issue, using 14 of its new planes as collateral. The carrier is issuing two classes of certificates, backed by six Boeing 787-8 aircraft, two 777-300 jets and six Airbus 320-200s. All the jets are due for delivery between this year and

June 2014. Although common among airlines, this type of financing is used for the first time in the UK.
The Class A certificates, worth $721.6 million (₤470.6 million), have an annual coupon of 4.63 percent, to be paid quarterly. The Class B certificates, which are raising $205.4 million (₤134 million) have an annual coupon of 5.63 percent, also to be paid quarterly.

“This transaction marks a strategic milestone as we diversify our sources of funding,” Enrique Dupuy, IAG’s finance director, said.
**Analysts on IAG**
!m[IAG Share Price: Bankia Sells Stake in British Airways’ Owner](/uploads/story/3455/thumbs/pic1_inline.jpg)
Deutsche Bank reaffirmed its “buy” rating on IAG’s shares in a research note sent to investors on
Tuesday. The bank currently has a price target of 330p.
A total of four analysts have rated the stock with a “sell” rating, six have given it a “hold” rating and seventeen have assigned a “buy” rating. The company has a consensus rating of “hold” and a price target of 474.05p.
**IAG’s share price was 263.07p as of 27.06.2013, 10.20 BST.**
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