Former Qatari Prime Minister takes stake in Spanish department store El Corte Inglès
Former Qatari Prime Minister Sheikh Hamad bin Jassim bin Jabr al-Thani will take a 10 percent stake in Spanish department store El Corte Ingles for EUR 1 billion (USD 1.1 billion) as he builds his portfolio as a solo investor
He will get shares from the treasury stock and a seat on the Madrid-based company’s board after the deal, El Corte Ingles said in an emailed statement late Monday. The sale will occur through “an instrument convertible into shares within three years,” it said, without giving further details.
Sheikh Hamad, who played a key role in Glencore International Plc’s takeover of Xstrata Plc in 2013, is back as a private investor after injecting EUR 1.75 billion into Deutsche Bank AG through his Paramount Holdings Services Ltd. investment vehicle last May. Al Mirqab Capital SPC, another vehicle he controls, made a cash offer for Heritage Oil Plc last year that valued the company at GBP 924 million (USD 1,440 million).
Sheikh Hamad was ousted as prime minister and head of Qatar’s USD 100-billion sovereign wealth fund in 2013. During his time at the fund he oversaw investments in Barclays Plc and Total SA. Qatar’s investment abroad averaged USD 60 billion a year between 2008 and 2012, the International Monetary Fund said in 2013.
With his latest Spanish deal, Sheikh Hamad said he wants to stay with the company “and will support El Corte Ingles’ development strategy.” El Corte Ingles operates 88 stores, of which 86 are in Spain and two in Portugal, and 43 Hipercor large supermarkets, according to its 2013 annual report. The group earned EUR 174.4 million of profit in 2013 on sales of EUR 14.3 billion.
The retailer is in a transition phase after the September death of Isidoro Alvarez, its chairman who built the company into Western Europe’s largest department store owner. Under Alvarez’s successor, Dimas Gimeno, El Corte Ingles is seeking to position itself to benefit from a pick-up in consumption as the Spanish economy emerges from a five-year slump, with growth of 3.3 percent expected this year, according to the government.
Qatari billionaire occupy a seat on the Board of Directors of the company and has declared that comes with long-term and contribute to the development and international expansion of the company. It will be the first foreign member of the Board of Directors in the company history. According to El Corte Ingles, the investment “has been made through an instrument convertible into shares in three years.” These actions are part of the company’s treasury, which reaches 13% of capital.
The company said in a statement it “is for us a source of great satisfaction to our group incorporate a global investor as qualified. This agreement is the result of a process that has matured and has completed a very successful partnership for both parties. The new shareholder will accompany us in our growth and expansion in an environment of cooperation.” The deal values El Corte Ingles 10,000 million and strengthens the position of the Spanish group, which in recent years has encountered problems to refinance its debt of EUR 5000 million.
El Corte Ingles is a world leader in large department stores and a benchmark of Spanish distribution. With more than 70 years’ experience, the Group has maintained from the outset a policy of customer service and an ongoing concern with adapting itself to suit the tastes and needs of society. This has led, in turn, to a policy of diversification and the creation of new business formats. In addition to the El Corte Ingles department stores, the Group has other chains, such as Hipercor, Opencor, Supercor, Sfera, Telecor, Viajes El Corte Ingles, Bricor, Optica 2000 and Informática El Corte Ingles, among others.
El Corte Ingles group has put in place a diversification strategy as well as a specialisation policy, which has resulted in the creation of a variety of commercial formats. Each of the strands is designed to meet the demands of a certain market segment. El Corte Ingles is the Group’s main line of business and the widest ranging format, as it is based on the department store model, which encompasses all types of products and services, from the latest trends in fashion and accessories to sporting goods, cultural products, electronics, household goods and food.