Spain’s Repsol announces 2.7-bn euro share buy-back

Spain’s biggest oil group Repsol said Monday it will buy back 2.7 billion euros of its own shares held by building group Sacyr Vallehermoso, which is seeking to raise cash to pay heavy debts.

Repsol chairman Antoni Brufau announced the planned transaction during a visit to Russia, a company spokesman told AFP in Madrid.

Sacyr is reportedly racing to sell off half of its 20-percent stake in Repsol in order to refinance a loan. The 10-percent stake is worth 2.7 billion euros ($3.5 billion) at Repsol’s current share prices.

Sacyr and Repsol shares were suspended on the Madrid stock exchange on Tuesday morning.

The Spanish builder borrowed heavily at the height of the property boom, which collapsed in 2008, and it posted a net debt of 11.4 billion euros at the end of September.

Brufau was in Russia to sign a deal to launch a joint venture with Alliance Oil to explore for oil in eastern Russia, subject to regulators’ approval.

Repsol said in a statement the Spanish and Russian companies had agreed to form a joint entity worth $840 million (645 million euros). Alliance will hold 51 percent and Repsol 49 percent.