Spanish carrier Iberia is the latest airline to float on the stock market and already it is the focus of a nasty little dispute with the bigger institutional shareholders who bought 30 per cent of the company a year ago.
The problem is that when banking giant BSCH and Logica bought 30 per cent of Iberia, the airline was valued at €2.7 billion. This week's listing price of Iberia values the airline at just €1 billion.
But in what seems to be an extraordinary development, another early investor - British Airways - was able to negotiate a rebate if the IPO price for Iberia was below what it actually paid for its 9 per cent stake in the Spanish airline. This arrangement means that BA stands to get a €140 million-odd windfall rebate, while American Airlines also has a similar rebate arrangement in respect of its 1 per cent stake.
BSCH, Logica and the other early investors are less than impressed and are looking for equal treatment with BA and AA. Iberia says no and that it is legally prevented from compensating the shareholders. One hopes that Iberia will not be going back to the market in the near future looking for money.
