It was reported late December that George Soros had purchased a 3% stake in Spanish construction group Fomento de Construcciones & Contratas SA (FCC) from its founding family. Shares in the company, struggling with an overload of debt, jumped nearly 9% when the news hit the wires.

George Soros

Soros buys in to FCC

That news was confirmed yesterday by the Financial Times which said Soros concluded a deal to buy 3.1% in FCC from Esther Koplowitz, the company’s largest shareholder.

It may be noted that Soros is apparently following in the footsteps of Microsoft Corporation (NASDAQ:MSFT) co-founder Bill Gates, who acquired a 6% stake in FCC in late October 2013 worth an estimated €113.5M. Soros is therefore the second international investor of global repute to take a proxy bet on the fledgling Spanish economic recovery through an investment in a construction company.

Spain rapidly on the mend

The country’s banks met with praise from Klaus Regling, the director of the European Stability Mechanism (ESM) who said recently that they were back on a “sound footing.” Spain will exit its banking bailout later this month.

Meanwhile, the employment situation in the country appears to be improving rapidly. “In 2014, the projections we have at the Economy Ministry point to a net creation of jobs, even above what we forecast when we drew up the state budget,” said Spanish economy minister Luis de Guindos yesterday. Earlier, in his end-of-year speech to the nation, the Spanish Prime Minister had claimed that the year 2014 would be marked by an economic recovery.

Earlier today the Spanish Labour Ministry announced that the number of jobless persons in the country fell by 107,570 in December, the best drop on record for that month.

In early December 2013, ratings agency Moody boosted its outlook on Spain from Negative to Stable, citing a real improvement in its finances and economy.

FCC cutting debt

A few days ago, FCC was in the news for the sale of 51% of its Spanish renewable energy business to Plenium Partners SA, a company based in Madrid. The business has a generation capacity of 422 megawatts, and the deal helped FCC chop debt by approximately $1B.

The company is in negotiations for refinancing loans worth €5B, of which as much as €1.5B would be ‘payment in kind’ loans, a kind that have a salutary effect on the borrower’s cash flows.

The company also successfully refinanced its UK subsidiary’s debt recently – an indication that lenders were confident of its business outlook and restructuring strategy.