Mota-Engil to reduce stake in the restructuring of Spanish company Duro Felguera

The Spanish company Duro Felguera, in which Mota-Engil has a stake through Mota-Engil Mexico, announced on Tuesday a restructuring plan that involves the sale of non-strategic assets and a loan followed by a capital increase by its largest shareholder, the Prodi Group. The Portuguese construction company is not participating and will dilute its stake.

The restructuring plan was announced on Tuesday by the Comisión Nacional del Mercado de Valores (CNMV) and led to the suspension of trading in Duro Felguera shares, which have accumulated an 84% devaluation since March 2021. Mota-Engil shares are down 2.4% this Tuesday morning, but have gained 99.7% since the beginning of the year.

The restructuring plan, approved by the board, provides for the sale of the non-strategic assets of Duro Felguera, which is 30.77% owned by Grupo Prodi and 23.89% by Mota-Engil México, which in turn is 51% controlled by Mota-Engil SGPS.

The Prodi Group will provide a loan convertible into capital of €10 million, which will not be matched by Mota-Engil México, which will thus dilute its stake.

The plan also provides for the restructuring of creditors’ financial debt, with write-offs of up to 100%, and the establishment of new payment terms and repayment schedules.

Duro Felguera’s management intends to submit the plan to creditors for approval by a judge by the end of the month.

This is the culmination of months of negotiations with creditors and shareholders to keep the Asturian construction company in business. Duro Felguera’s difficulties have been dragging on for several years. In 2023, the Prodi Group and Mota-Engil Mexico went ahead with a €90 million capital increase, which nevertheless did not prevent the Spanish construction and engineering company’s financial situation from deteriorating again.