VZCZCXRO7676
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHMD #1226/01 3290817
ZNR UUUUU ZZH
P 240817Z NOV 08
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC PRIORITY 5610
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAS/AMEMBASSY ALGIERS 4026
RUEHBO/AMEMBASSY BOGOTA 5380
RUEHBU/AMEMBASSY BUENOS AIRES 0394
RUEHCV/AMEMBASSY CARACAS 1322
RUEHLP/AMEMBASSY LA PAZ 1324
RUEHMO/AMEMBASSY MOSCOW 0921
RUEHQT/AMEMBASSY QUITO 1429
RUEHRB/AMEMBASSY RABAT 6124
RUEHLA/AMCONSUL BARCELONA 3667
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 MADRID 001226 
 
SIPDIS 
 
STATE FOR EUR/WE:SAMSON,ZERDECKI AND EEB/IFD/OMA 
TREASURY FOR OIA/OEE/W.LINDQUIST 
COMMERCE FOR 4212/DON CALVERT 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ENRG EPET SP SCUL
SUBJECT: MADRID ECONOMIC WEEKLY, NOV. 17-21 
 
MADRID 00001226  001.2 OF 002 
 
 
Contents 
 
EFIN: Banks Take Advantage of Less than Half of GOS 
5-Billion-Euro Aid Offer 
EINV/EPET: Russian Company Lukoil Interested in Repsol Stake 
ECON/SCUL: Odyssey - Culture Ministry Reaffirms Opposition to 
Negotiating 
EFIN: Second Largest Real Estate Bankruptcy This Year 
ENRG: Investors Buy Portuguese Wind Power Producer 
 
 
Banks Take Advantage of Less than Half of GOS 5-Billion-Euro 
Aid Offer 
 
1.(U) Spanish banks and cajas (savings banks) took advantage 
of less than half of the asset-purchase aid offered by the 
GOS in a liquidity auction November 20.  Out of the 5 billion 
euros available, Spanish banks and cajas subscribed to only 
2.1 billion euros.  Experts speculated that banks did not 
take advantage of this liquidity measure due to more 
favorable options at the European Central Bank.  Others 
suggested that this low level of subscription was indicative 
of a strong financial situation in Spain.  The twenty-three 
approved financial institutions taking advantage of this 
offer included small and mid-size financial institutions such 
as Caja Castilla La Mancha, Caja Duero, BBK, Kutxa, and 
others.  Another 5-billion euro auction is expected to occur 
in December.  (All media, 11/21) 
 
Russian Company Lukoil Interested in Repsol Stake 
 
2.(U) On November 19, the Russian company Lukoil, which 
includes among its shareholders the U.S. company 
ConocoPhillips, announced it was in negotiations to acquire 
almost 30% of the oil and gas company Repsol.  20% would be 
from troubled construction company Sacyr Vallehermoso, and 
the rest would be from financial institutions.  Lukoil is 
reported to be willing to pay a premium of more than 100% 
over Repsol's current stock market price.  Press reports 
noted that unlike Gazprom, which had expressed interest last 
week in the Sacyr shares, Lukoil is not owned by the Russian 
government.  However, Industry and Commerce Minister 
Sebastian said on November 19 that the GOS would do 
everything possible to ensure that Repsol stays independent 
and Spanish.  Spanish political parties are expressing their 
concern over the possible Russian purchase, although 
President Zapatero said November 20 that he was "open" to the 
deal, citing Lukoil's private status and U.S. shareholder. 
(All media, 11/20 and 11/21) 
 
Odyssey - Culture Ministry Reaffirms Opposition to Negotiating 
 
3.(U) The Culture Ministry released a statement November 18 
reaffirming that the GOS is not amenable to negotiating with 
Odyssey over the remains of the "Black Swan" shipwreck, which 
the GOS believes to be Spanish-flagged vessel Nuestra Senora 
de Las Mercedes. This statement was released in response to 
Odyssey's recent website statement indicating that it is 
still hopeful that it can reach an amicable agreement with 
Spain.  On November 17, the American company submitted to the 
Tampa Admiralty court its rebuttal to Spain's claim to the 
Black Swan treasure find.   (EFE, 11/18) 
 
Second Largest Bankruptcy Filing this Year 
 
4.(U) Real estate group Tremon announced November 17 that the 
company had filed for administration of over 1 billion euros 
in debt after failing to raise enough capital to meet debt 
payments.  Tremon is the second largest real estate company, 
after Martinsa Fadesa, to seek administration proceedings 
this year.  Sixteen banks are particularly affected by this 
filing, especially Banco Popular and Bancaja, which owned 200 
million euros and about 100 million euros respectively of the 
debt covered by the bankruptcy filing.   The bankruptcy 
proceedings only apply to the group,s real estate 
development units and not to its hotel and leisure park 
management businesses.  Given the ailing housing market, 
 
MADRID 00001226  002.2 OF 002 
 
 
construction and real estate firms represent a quarter of all 
those in default of debt payments, according to the GOS. 
(All media, 11/17 and 11/18) 
 
Investors Buy Portuguese Wind Power Producer 
 
5.(U) The Spanish-Portuguese private equity firm Magnum 
Capital purchased the Portuguese wind farm company Enersis 
from the Australian firm Babcock & Brown for 1.15 million 
euros.  Enersis provides about a quarter of Portugal's wind 
power, with 515 MW of installed wind capacity and 156 MW 
under construction.  Magnum's Spanish shareholders are former 
directors of Banco Santander.  BBVA and three Portuguese 
banks funded the purchase.  (El Confidencial, 11/17; El Pais 
English; 11/18) 
AGUIRRE