Ferrovial shareholders approved Thursday a plan to move the Spanish construction giant’s headquarters to the Netherlands despite objections from Spain’s leftist government.
The firm, which manages London’s Heathrow airport and has road projects in the United States, argues the move will give it access to cheaper credit and boost its appeal to equity investors ahead of a planned US stock listing.
But Socialist Prime Minister Pedro Sanchez’s government, which is facing a year-end general election, accuses Ferrovial of seeking to pay less tax, a charge it rejects.
Under a plan first unveiled in February, the firm will change its domicile through a so-called reverse merger, with the group’s Dutch subsidiary absorbing the Spanish holding company.
“It is approved,” the company’s chairman and biggest shareholder, Rafael del Pino, said after the proposal was put to a vote at an annual general shareholders’ meeting.
The government has been fiercely critical of the move, accusing Ferrovial and its billionaire chairman of disloyalty.
It has noted that the awarding of public contracts to the company, founded by Del Pino’s father in 1952, helped it become one of Spain’s biggest.
And it accuses Ferrovial of trying to benefit from lower Dutch taxes on corporate income and dividends.
“There are extraordinarily positive examples in Spain of great businessmen who are dedicated to their country”,” Sanchez said last month.
“I don’t think it is the case of Mr del Pino,” he added.
– ‘Not leaving Spain’ –
Del Pino, 64, who controls around 20 percent of Ferrovial, is Spain’s third-richest person, with a fortune of around $4.5 billion, according to Forbes.
The company grew over the decades from a modest railway construction company into a global conglomerate which won contracts for the Guggenheim museum in Bilbao and the Barcelona Olympics.
In addition to operating Heathrow, Ferrovial’s toll road division includes projects in Australia, Canada and the United States.
Ferrovial has justified the planned move of its headquarters on the grounds that it derived more than 80 percent of its revenues last year outside of Spain.
It argues the move will not affect its operations in Spain, where it employs around 5,500 and where it will still pay tax.
“Ferrovial is not leaving Spain,” Del Pino said at the start of the annual general meeting.
“Ferrovial will maintain its activity, its jobs, its projects, its investment plan and its listing in Spanish stock markets.”
The company would pay a “similar” amount of tax in Spain after the relocation as it did, Del Pino added.
Ferrovial paid 282 million euros ($311 million) in taxes in Spain last year, he said.
– ‘No problem’ –
But the government — which fears other firms could follow Ferrovial’s example — argues a listing in the United States is possible for a company based in Spain.
“There is no problem for a double listing. A company based in Spain can list in the US stock market,” Budget Minister Maria Jesus Montero told private television channel Antena 3.
In a letter sent to the government on Tuesday, Ferrovial Chief Executive Ignacio Madridejos said no Spain-based firm has up until now had a full listing in the United States.
Spanish bank Sabadell estimates the company could save 40 million euros per year in tax payments by moving its headquarters to the Netherlands, but other experts put the figure far lower.
Ferrovial’s planned move follows in the footsteps of other major European firms such as aircraft manufacturer Airbus, which has its head office in Toulouse in France but its headquarters are registered in the Dutch city of Leiden.
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