Reuters: Hot Stocks: UPDATE 2-Austria's Alpine Bau goes bust, Spain's FCC takes hit

Reuters: Hot Stocks Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 2-Austria's Alpine Bau goes bust, Spain's FCC takes hit Jun 19th 2013, 11:59 Wed Jun 19, 2013 7:59am EDT * Alpine Bau files for insolvency, to get administrator * Parent FCC to take 289 million euro hit * Thousands of jobs at risk * FCC shares fall 5.9 pct (Combines stories, adds work council head, market reaction) By Michael Shields and Jose Elías Rodríguez VIENNA/MADRID, June 19 (Reuters) - Alpine Bau GmbH, Austria's second-biggest construction firm, filed for insolvency on Wednesday with liabilities of up to 2.6 billion euros ($3.5 billion) in what could become the country's biggest corporate collapse since World War Two. The move deals Spanish parent FCC a hit of 289 million euros after tax, affects lenders including Bank Austria and Erste Group, saddles Austrian taxpayers with as yet undetermined losses from debt guarantees, and could lead to thousands of job losses. The filing to a Vienna court means an administrator will now review the state of affairs at Alpine Bau, the core unit of the Alpine Holding GmbH group that FCC took over in full last year. Alpine Bau employs 6,500 and has liabilities of up to 2.6 billion euros and assets of 661 million, creditor agencies said. Shares in FCC fell 5.9 percent to 7.365 euros by 1120 GMT while the European construction sector index eased 0.3 percent. Trading in 290 million euros worth of Alpine bonds in Vienna was suspended indefinitely. Heavily indebted FCC is trying to clean up its balance sheet by selling assets and writing down losses on investments in renewable energy and construction. It is highly exposed to Spain's sick economy, with real estate, cement and energy businesses that have been badly hurt since a property bubble burst five years ago. One investor in Madrid said the Alpine writedown was a painful but necessary step to return FCC to health. "The new management team has to make the group viable in the long term, reduce debt and sell assets. There's a price the company has to pay to achieve this end," said Jose Lizan, fund manager at Auriga Global Investors, who does not own FCC shares. RETRENCHING The loss-making Alpine group, pulling back from a costly expansion drive in eastern Europe, had also tried in vain to sell energy and engineering units to raise cash. It had started a second round of debt talks after FCC in March injected more money into the unit in return for creditors' taking a 150 million euro haircut. Alpine Chief Executive Arnold Schiefer had put a positive spin on talks as recently as Tuesday, saying he expected to wrap up a deal within three weeks at the latest. But the curtain fell for Alpine when FCC pulled the plug on fresh financing only hours later, its works council chief said. "It was a real surprise," Hermann Haneder told Austria's ORF radio, saying FCC and banks had been sending positive signals about helping Alpine get back on its feet. He said he was worried that Alpine's woes would drag down many small suppliers as well. "I fear, and the labour ministry has projections, that 500 companies could go bankrupt in a worst-case scenario. That means a crazy number of jobs, I think 4,000 or 5,000," he said. Austria's finance ministry said it was not yet clear how much of the 150 million euros of state guarantees it had made to Alpine would be needed, saying this depended on the payout quota that creditors will receive. Alpine Bau proposed paying out 20 cents on the dollar within two years, which would mean taxpayers would face a 120 million euro hit, but this still needed to be confirmed. The court-appointed insolvency administrator will now assess over coming weeks whether the company's restructuring plan was acceptable, creditor agency KSV said. There were some bright spots in the otherwise gloomy news for Alpine, which built Munich's Allianz Arena stadium, three stadiums for the 2012 European Football Championships in Poland, and the Tsankov Kamak hydropower plant in Bulgaria. Austrian builder Porr said it was in talks about acquiring some of the assets of Alpine Bau. Strabag, Austria's largest builder, said it would not try to buy any of the assets for anti-trust reasons. FCC, Spain's fifth-biggest builder, lost 140 million euros in the first quarter, partly due to losses in Alpine. The Spanish group has had declining revenue for eight consecutive quarters as Spanish public-sector contracts disappear in a protracted recession. Around half the company's revenues come from Spain. FCC has a three-year plan aimed to reduce net debt by 2.7 billion euros by 2015 and focus its business on infrastructure, environmental services and water management. At end-December FCC's net debt was 7.3 billion euros. ($1 = 0.7467 euros) (Additional reporting by Alexandra Schwarz-Goerlich and Georgina Prodhan in Vienna and Sonya Dowsett in Madrid; Editing by Mark Potter) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions