The Ferrovial shareholders’ meeting has just endorsed the transfer of the group’s headquarters from Spain to the Netherlands, after the operation proposed by the board of directors was referendum. It was about point 10 on the agenda, whose percentage of support will be known when the act ends. With a quorum of 77.6%, the board has given the ‘green light’ to the operation thanks to the support of the large owners (almost all of the Del Pino family companies) and several foreign funds.
Ferrovial faced its ‘d’ day. A day that will be historic in which the shareholders of the company have authorized the transfer. The meeting called for this Thursday at the ONCE Auditorium in Madrid to celebrate the event began at 12:30 p.m. with a speech by the group’s president, Rafael del Pino, who has defended this operation as the best for the interests of the corporation. Although also for Spain.
Del Pino has clarified in his speech – lasting less than 20 minutes – that the company “is not pursuing any tax advantage” for moving to the Netherlands. The executive has insisted that there is “an existence of valid economic reasons” to carry out the operation to change the registered office. A clear wake-up call after the statements by government ministers in recent days in which they have warned him, with the Treasury at the helm, that he has to clearly justify those reasons to continue taking advantage of the tax advantages that he has through the Corporation tax.
The president of Ferrovial has indicated that these are the reasons that “allow us to accept the merger tax regime”. This regulation enables the group to maintain tax advantages that it could lose if the group does not justify to the Tax Agency the real reasons for the transfer.
Rafael del Pino wanted to remind his shareholders that Ferrovial will continue to be Spanish with an important statement: The change of headquarters from Madrid to Amsterdam “is the best contribution that this company can make to the society where we are present.” In fact, he has insisted that the group will continue to operate in Spain, “we will maintain employment” and “we will continue to contribute fiscally” to the national Treasury, as up to now.
The speech has involved an exposition of the different economic reasons that have led him to make this decision: the transfer “is part of the natural development” of Ferrovial; “seeks to improve its ability to compete and grow internationally”; it “aligns” with the corporate structure (controlled to a large extent by foreign investors); “It facilitates better financing conditions”, with a risk premium in the Netherlands that is better than that of Spain; and “increases investment capacity” in the American market. “It is not easy or immediate to establish a direct listing in the US,” he has indicated.
After knowing the result of the vote, sources from the Ministry of Economy point out that they “respect the decision” adopted and that they will continue working “to attract investment and encourage companies in Spain to grow, create jobs and access financial markets from our country in the best possible conditions. “️We are going to continue working constructively with all Spanish companies to defend their interests and promote their expansion and growth,” add those same sources.
The Executive insists that “as has been made clear”, these sources indicate, from the analyzes of the stock market supervisor (CNMV) and the Spanish Stock Markets and Markets (BME), “companies listed in Spain can be listed on the North American stock market if they so request”, since “there are no legal, regulatory or operational obstacles that prevent it.
The company has taken care of all the details of the event, which has become almost a matter of State. On both sides of the table where the board of directors is going to sit, there are four flagpoles with two flags, twice: those of Spain and those of the European Union. After the intervention of Rafael del Pino and the CEO, Ignacio Madridejos, it will be the turn of the small shareholders (there is capacity for almost 600 people) and the voting, at around 2:00 p.m.
And the shareholders are already agreeing with him. After culminating his speech with a standing ovation from the almost 400 owners who have attended the meeting, Del Pino is seeing a trickle of criticism from the owners, but to the Government. Some foreign shareholders have gone so far as to point out that “any interference by public authorities is a violation of property rights.”
Also a representative of one of the associations of small shareholders has pointed out in his speech that the attitude of the Executive “borders on legality” after the statements of numerous ministers in recent days.
Pending the vote, the last script change was carried out by the Norwegian sovereign wealth fund, which will vote in favor of the transfer after announcing its refusal 24 hours before. His position is not crucial for the Ferrovial board of directors to get a majority of the shareholders (over the quorum that attends the meeting today) to endorse the transfer of headquarters from Madrid to Amsterdam. But it does mean more support than the group’s president, Rafael del Pino, is making sure along with the rest of the large owners prone to the operation proposed at the beginning of March.
If nothing changes, the president himself will vote in favor of the transfer, through the company Rijn Capital (with 20.4% of the company). So will his sister María de él, owner of another 8.2%. As well as the British fund TCI (The Children’s Investment Fund), the third largest shareholder of the infrastructure group, with 5.5%. To all of them is added Norges, as well as the recommendation made by the minority shareholder associations, which have shown their support for the transfer.
Although his opinion is not binding for small owners, it is considered essential support for the vote. Another of the members of the Del Pino family has been shown against. This is Leopoldo, who, with 4.2% of the capital, has already anticipated that he will vote ‘no’ to this transfer if certain conditions are not guaranteed.
Although the firm is expected to get a majority of votes in favor at the meeting, the real challenge of the change of venue begins a minute after the meeting ends. Because from that moment on, and for a month, those who have refused the transfer can take advantage of their right to sell their shares in the firm to Ferrovial itself. And that’s where the ordeal can begin: if the number of shareholder requests exceeds 2.5% of the capital, the operation may decline. The construction company has limited to 500 million euros the amount that it would allocate to cover the right of separation. If the requests exceed that amount, it could increase the cap, although for now it does not seem that it is going to do so.
The insistence of the Government for Ferrovial to have its arguments well forged to move its headquarters from Madrid to Amsterdam has activated all the springs of the company through various professional firms that are working on a suitable statement of reasons for moving to the Netherlands.
The Minister of Finance, María Jesús Montero, insisted again yesterday that the company can put at risk the tax advantages of the special merger regime, included in the Corporation Tax, because “the legislation is clear.” She and she indicated: “When there are no economic reasons, there are certain tax elements that the company cannot apply.” This is what the Law says, without this implying, in any case, that it has to be transferred to this specific case because it will be at the right time, when the Tax Agency knows the real and specific situation, which it will have to assess. if the reasons of the company are or not those that correspond to the current legislation, “he clarified.
The construction and concessionaire group has insisted from the moment it announced its decision that it is a transfer that has been analyzed, studied, agreed upon and technically assessed by the board of directors. And that it is not a decision against the Executive or against the Spanish economy. However, the company has commissioned reports from various consultants in order to adequately justify this change of registered office.
The General Council of Economists (CGE) explains that if the Tax Agency finally investigates the operation and concludes that there are no “valid economic reasons to carry it out” and that there are only fiscal reasons, Ferrovial could face a tax penalty of 25% on the unrealized capital gains on your assets. The list of these economic reasons exceeds 70 reasons to justify this social change.
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