Spanish Companies Exiting Catalonia After Referendum
When voters took to polls on 1 October to decide on the independence of Catalonia, there were seven companies in IBEX-35 with registered office in the autonomous community. A week after, and with the Catalan government set to declare its unilateral independence, this number had fallen to one.
One after another, Banco Sabadell, CaixaBank, Gas Natural, Abertis, and Colonial and took the decision to move their registered offices to places like Alicante, Valencia and Madrid, and a number of smaller listed companies have followed suit. The only IBEX-35 company holding firm at the moment is Grifols, whose founding family has longstanding ties to the region.
Legal wheels can move quickly in times of uncertainty. In this case, on 7 October the Official State Gazette published changes to article 285.2 of Companies Law that allows the board to change the registered office of a company within national territory without shareholder approval, absent a contrary provision in a company’s bylaws. And even if the bylaws expressly prohibit the board from such a move, as is the case for CaixaBank, a convenient transitional provision was included stating that the contrary provision only applies if it is approved after the new law has come into force.
Share prices of Catalonia based companies, which have taken a hammering following the referendum, bounced back somewhat after the companies approved the change of registered office.
The change of registered office does not mean changes to the business operations of these companies, and only has limited tax implications to Catalonia (assuming it remains part of Spain). However, after a summer “bank run” that resulted in the rescue of Banco Popular and subsequent fears of contagion in the market, financial institutions based in Catalonia are looking to reassure their customers and shareholders by ensuring the certainty and stability that the European Central Bank’s legal and regulatory framework provides. From the decision to move registered offices, to the amended law that made the moves possible, exceptional times call for exceptional measures.
Matti is an analyst covering the Southern Europe region.
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