Bankia SA to return retail investors IPO money plus interest

BLOOMBERG

Bankia SA is starting a process to reimburse retail investors for losses they suffered in a public offering of shares in Spain’s fourth-biggest bank in 2011, a year before it need a European bailout.
Retail investors will recover 100 percent of their investment plus 1 percent annual interest, the Valencia, Spain- based bank said in a filing to regulators Wednesday. Shares in Bankia rose as much as 5.8 percent in Madrid as the lender said the process would save it legal costs.
Bankia raised more than 3 billion euros ($3.67 billion) in 2011, with 1.85 billion euros coming from retail investors in a public offering that has been criticized by Spanish judges. A year later, Spain requested 41 billion euros in European aid to help prop up failing former savings banks including Bankia, which alone needed 22 billion euros in public aid.
About 200,000 investors will seek reimbursement and the process will save Bankia about 400 million euros in legal costs and interest payments, Chief Executive Officer Jose Sevilla said at a news conference in Madrid Wednesday.
The process for investors to claim back their money starts Feb. 18 and will be open for three months. The bank plans to return the money within 15 days after the investor claims it.
The bank and it’s state-owned parent BFA have already provisioned 1.84 billion euros to cover all estimated IPO claims. The Spanish Supreme Court on Jan. 27 rejected two appeals by Bankia and ruled that the IPO’s prospectus filings contained “serious inaccuracies.”