The Spanish government’s rescue plan to save nine toll roads with combined debt and equity of Euro 4.5 billion (US$5.8 billion) is contingent on the highway companies taking a total loss on their equity and the banks taking a 50% writedown of their defaulted loans. For its part, the government would take on some Euro $1.2 million (US$1.6 million) of debt owed to owners of land on which the highways were built.
The new rescue plan, filed at Madrid Mercantile Court 6 in mid-October, was admitted by the judge as the basis for a ruling since no other plan challenging the government was filed by the toll road companies. After a two-year wrangle, Spanish authorities seem to have worn down the resistance of the highways’ equity owners and the Spanish banks, who wanted a deal that would have repaid them fully over time. But under such a plan Spain would have had to book all the debt on its own balance sheet, which would have ballooned its deficit and run it afoul of EU deficit targets.