Spanish direct investment’s real exposure in LatAm is Brazilian

Bolivia’s decision to nationalise airport operator Sabsa, subsidiary of the Spanish Abertis, has somehow affected stocks in Madrid, where already risk aversion among investors is rampant. The parent company, listed on Ibex 35, fell 2 percent and dragged down the rest of the Spanish corporates with involvement to Latin American economies.

Yet, Bolivia accounts for the last position in the list of countries receiving direct investment from Spain’s large companies. Afi analysts issued today a simple but compelling chart showing Brazil is the main target of the more than €100-billion total exposure.

The impact of the Bolivian government’s move on Abertis, in fact, was written off by most independent estimates. Bankinter Bolsa said “it will have little relevance on Aberti’s evolution, as this investment had already been provisioned for and Bolivia’s airports represented a mere 0.5 percent of Abertis’ turnover last year.” Bankia Bolsa also agreed that “there is no impact on Abertis’ balance sheet.”

Sabsa had initiated an international arbitration process when the Bolivian authorities refused to allow the Spanish subsidiary to increase fees as stated in the contract.

“The company would like to make clear its its respect for the Bolivian government’s decision to nationalise Sabsa,” Abertis explained in a press release, “provided that this process is carried out in accordance with the principles of international law. Abertis, which controls Bolivia’s three principal airports (Santa Cruz, La Paz and Cochabamba) via the concession company Sabsa, is prepared to commence negotiations with the Bolivian government and expects to reach an accord on appropriate compensation.”

Abertis defended its record, adding that since acquiring Sabsa and over the 2005-2012 period, it invested $12.6 million in capex and paid fees of $38.6 million to the awarding authority, and tax of $9.4 million in tax.

About the Author

Victor Jimenez
London contributor at thecorner.eu, reporting about the City and the Eurozone economies. He regularly writes for Spanish newspaper group Prensa Ibérica--some of his features include shared work with journalists of The Daily Telegraph and the BBC.

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