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.
© 2019 Glass, Lewis & Co., and/or its affiliates. All Rights Reserved.
This blog is for informational purposes only and is updated periodically to keep Glass Lewis' clients and other interested parties informed of current corporate governance developments and regulatory trends. The information contained herein should not be construed as legal or investment advice. Glass Lewis analyzes issues it believes may be of interest to its subscribers and makes recommendations as to how Glass Lewis believes institutional shareholders should approach such issues. While Glass Lewis may mention certain companies in its blog postings, Glass Lewis never comments on the investment merits of the securities issued by the subject companies. Therefore, none of the information posted through this blog should be construed as a recommendation to invest in, purchase, or sell any securities or other property. All recommendations stated herein must be construed solely as statements of opinion, and not as statements of fact, and may be revised based on additional information or any other reason at any time.
The information contained in each blog posting is based on publicly available information. While Glass Lewis exercises reasonable care to ensure that all information included in this blog is accurate and is obtained from sources believed to be reliable, no representations or warranties express or implied, are made as to the accuracy or completeness of any information included herein. In addition, Glass Lewis shall not be liable for any losses or damages arising from or in connection with the information contained herein or the use or inability to use any such information.
Glass Lewis expects readers of its blog possess sufficient experience and knowledge to make their own decisions entirely independent of any information contained in Glass Lewis’ blog postings. Subscribers are ultimately and solely responsible for making their own decisions. This blog is intended to serve as a complementary source of information and analysis for subscribers in making their own decisions and therefore should not be relied on by subscribers as the sole determinant in making decisions.