Ferrovial, a Spanish infrastructure company and part-owner of Heathrow, has caused a political storm. It proposed to move its head office to the Netherlands following questions from its founder about the Spanish business climate.
Nadia Calvino, Spain’s deputy prime minister, said that Ferrovial was unacceptable. Several members of the government also condemned it and suggested it was betraying a country it was indebted to.
Calvino stated that she had “expressed her rejection of this wrong choice” during a Wednesday call with Rafael del Pino (the billionaire Ferrovial chair and the son-in-law of its founder).
Although the Socialist-led coalition government has made foreign capital an important priority, it still remains unpopular among many Spanish corporate leaders, who disapprove of its tax policies, legal reforms, and criticisms of big business.
Del Pino, who holds 20% of the EUR19bn-company, stated in January that he believes Spain must be a desirable investment destination. He also said that Spain should attract the best talent. To do this, we need a strong labour market and legal certainty in every area.
Calvino stated that the company owes everything Spanish citizens and has grown because of public investments made by Spanish citizens. It is the emblem of our country.
Ferrovial’s decision “seems against the interests of the image” Spain she said.
Ferrovial explained its decision late Tuesday night in a presentation to investors. Ferrovial stated that the Netherlands has a stable legal framework and triple-A credit rating. It is also the country of choice for companies with significant presences in Europe and the USA.
The company stated that the move would align its corporate structure and international profile. It also noted that 82% of its revenues were earned outside Spain in 2013. It also stated that the move would help it to apply for US stock market listing.
Ferrovial stated that it would need shareholder approval to move the company and would be aiming to close the deal in the second quarter of 2023.
The reorganisation was designed to preserve employment, activity and investments in Spain, according to the company. It stated that there would be no material tax impact on the group, anticipating criticisms that it was trying reduce its tax bill.
However, the comments didn’t stop the political backlash. Yolanda Diaz (Deputy Prime Minister and member of the leftwing coalition partner Unidas Podemos) stated that “We must work towards a Europe without tax dumping.”
“I request shareholders to reconsider their decision and I hope the economy ministry will take all necessary steps to stop this from happening. This is not Spanish. She said that to be Spanish means to defend your country’s place.”
A ministry official stated that they were awaiting details to analyze the potential implications of Ferrovial’s decision. This was in light of the fact that Spain was investing public money in infrastructure as well as the foreign investments it was attracted.
Spanish companies have been upset by the government’s moves, including its decision to impose windfall tax on “extraordinary profits”, of its largest banks and energy companies in 2023/2024.
Juan Bravo, the top economist of the People’s party, stated that Ferrovial’s decision was an indictment against the government. He stated that the risk is there would be a contagion effect. We must attract foreign investment to Spain. First, we must ensure that the Spanish leaders and giants in Spain don’t leave.
Ferrovial International would merge its parent company to create its wholly-owned subsidiary Ferrovial International. Ferrovial has been based in the Netherlands ever since 2018. The parent company will be based in the Netherlands, listed in Amsterdam and Madrid and could apply for listing in the USA after the merger.
Ferrovial owns a 25 percent stake in London Heathrow airport. It also operates airports at Aberdeen, Southampton, and manages JFK terminal in New York. Its toll road division encompasses projects in the USA, Canada, UK and Ireland as well as Australia.
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