British Airways today paid the second and final instalment of its investment in Iberia Lineas Aereas de Espana SA, following the agreement signed in December with SEPI, the Spanish government agency responsible for Iberia.
This means that British Airways has now completed its acquisition of 9 per cent of the shares in Iberia. American Airlines has taken a 1 per cent holding in Iberia.
The value of British Airways’ investment will be in the region of £155 million (Ptas 41 billion). If the value of shares in Iberia offered through its public flotation is less, the sum paid by British Airways will be reduced accordingly.
British Airways paid the first half of its investment in December. The remaining 50 per cent was paid in cash today.
Through its investment, British Airways will be Iberia’s key industrial partner and will have the right to appoint two directors to Iberia’s 12 person board as well as representation on all Board sub-committees.
Following today’s second payment, British Airways’ two nominee directors will take their place on the Iberia Board - Roger Maynard, its Director of Investments and Joint Ventures, and the Rt Hon Lord Garel-Jones, UK Foreign Minister from 1990 to 1993 and now a Managing Director of investment bankers Warburg Dillon Read.
British Airways will be working very closely with SEPI, the institutional investors and Iberia’s management to support the privatisation process and drive the future business strategy.
Lord Marshall, British Airways’ Chairman and Chief Executive, said: “After extensive discussions with all relevant parties, I am delighted that we have been able to finalise all arrangements for British Airways to complete its investment in Iberia. We look forward to working with our fellow core shareholders and with SEPI towards a successful public flotation of Iberia in the near future.”