Industrialist Villar Mir glimpses new dawn in Spain
By Elisabeth O'Leary and Jose Elías Rodríguez
MADRID May 20 (Reuters) - Billionaire industrialist Juan Miguel Villar Mir has been buying into Spain's battered property and wind power sectors, marking a change in domestic sentiment after a six-year crisis.
Foreigners are returning, pushing government bond yields to levels not seen since before the economic downturn but most Spanish firms have stayed on the sidelines, concentrating on paying off their debts.
The 82-year-old Villar Mir, the chairman of builder OHL and its private conglomerate parent Grupo Villar Mir, prospered abroad during the crisis. With the economy growing at its strongest pace since 2007, he is now borrowing to fund acquisitions that may signal a new wave of investment in Spain.
"Spain is an investment opportunity now because things are cheap and the economy is recovering and hardly anyone has realised," the engineer told Reuters from a plush office near the top of his Torre Espacio, one of four landmark skyscrapers that dominate Madrid's skyline.
In January, he announced plans to sink 300 million euros into office-building owner Colonial in exchange for a planned 29 percent stake. The property firm is one of dozens that ran into trouble when Spain's building bubble burst in 2008, but its stock has soared 117 percent this year after Villar Mir backed a debt restructuring and recapitalisation.
He partly financed his Colonial stake with bank loans and said he aims for a 15 percent annual return on equity for all of his investments, including this one. That compares with an average financing cost of 7.7 percent, according to Moody's, down from a peak of 9.1 percent in 2011, but still four percentage points above Spain's 10-year benchmark bond.
Forbes estimates his net worth at $2.7 billion after he debuted last year on the magazine's global billionaires list.
A decision to exit Spanish housing in 2002 meant he skirted a spectacular crash which washed up hundreds of companies and banks -- although it also meant he missed an 80 percent gain in residential prices from 2002 to 2008. The tycoon says he is not expecting residential housing to recover for possibly another five years. Continuación...