Spanish train manufacturer Talgo has secured a important financial restructuring, paving the way for partial nationalization through investments from the Spanish state and a Basque consortium. The deal,finalized with shareholder approval,injects crucial capital into the company and marks a shift in ownership following a prolonged period of uncertainty [[1]]. Details of the agreement include a €45 million capital increase, a €30 million convertible bond, and a broader €770 million financing package-changes that also trigger a relocation of Talgo’s registered office back to the Basque Country after a decades-long absence.
Shareholders of Talgo have finalized plans for partial nationalization, approving the entry of the Spanish state and the Basque government into the company’s ownership structure. The move comes through the state-owned Sociedad Estatal de Participaciones Industriales (SEPI) and is part of a public-private consortium led by José Antonio Jainaga, president of steelmaker Sidenor. To facilitate the investment, shareholders approved a capital increase of 45 million euros and a convertible bond issuance worth 30 million euros. These bonds carry a fixed annual interest rate and, if not redeemed, will allow SEPI to increase its stake in the future.
As a result of the capital increase, the government agency, dependent on the Ministry of Finance, will hold an initial stake of approximately 7.8% of Talgo’s share capital. Meanwhile, the Basque consortium, with Jainaga at the helm and backed by the Basque Government through its investment fund Finkatuz, along with the BBK and Vital banking foundations, will acquire 29.8% of Talgo from the British fund Trilantic. The Basque group is set to contribute an additional 75 million euros to the deal.
In addition, a syndicated financing package of up to 770 million euros has been approved, structured with a tranche of up to 650 million euros guaranteed by Cesce, and a revolving tranche of up to 120 million euros, alongside guarantees of up to 500 million euros also backed by Cesce.
Board Changes
The financial rescue isn’t the only change underway at Talgo. The composition of the company’s board of directors is also being reshaped. The board will initially consist of eight members. The departure of several directors earlier this year – linked to Trilantic’s exit – coupled with the passing of independent director Emilio Novela in May and subsequent appointments, had already reduced the board to six members. The recent approvals will expand the board by two.
Capital Increase
Talgo shareholders have approved a 45 million euro capital increase and a 30 million euro convertible bond issuance as part of its rescue plan.
Sources indicate that current Chairman Carlos de Palacio Oriol and CEO Gonzalo Urquijo are likely to step down. The Basque consortium’s approach to granting Jainaga power – whether through an executive chairmanship with a trusted CEO alongside, or consolidating both roles – remains to be seen. This restructuring could leave up to three board seats vacant, assuming the current independent directors (Antonio Oporto del Olmo, Marisa Poncela, María José Zueco, and Mario Álvarez) remain in place, along with a representative from SEPI.
Further positions could be filled by Jainaga’s key associates if he opts to appoint a CEO, leaving one additional seat open, potentially for a representative of the Basque Government. The appointments are expected to be finalized in the coming days.
Meanwhile, according to EP, SEPI has nominated Juan Antonio Sánchez Corchero, current president of the Alava business association (SEA), as the new non-executive director at Talgo. Sánchez Corchero is a well-respected businessman in the Basque Country. Transport Minister Óscar Puente had previously indicated the government would seek a seat on the board once its investment was finalized, but did not disclose a specific nominee at the time.
Sánchez Corchero holds significant positions within the Basque business community, serving as Vice President of the Chamber of Commerce, Industry and Services of Álava, a member of the executive committee of the Basque Confederation of Entrepreneurs (Confebask), and Vice President and member of the executive committee of Cepyme and CEOE.
Beyond his roles in leading business associations, Sánchez Corchero also serves as President of Grupo Aspasia, an education company, and CEO of Grupo Autocaravanas Norte.
Registered Office Relocation
The extraordinary shareholders’ meeting on [date unspecified] marked the final time it will be held in Madrid, as one of the agreements tied to the Basque consortium’s entry is the return of the company’s registered office to the Basque Country, a move Talgo left due to ETA terrorism. Separately, the meeting coincided with José Antonio Jainaga’s appearance before the National Court regarding an investigation into steel sales to an Israeli company.
Jainaga defended the transactions, stating that at the time of the sales, no restrictions were in place and that he voluntarily canceled the deliveries in July, prior to the Spanish government’s arms embargo. He also noted that these shipments represented less than 0.2% of the company’s annual sales.
This shareholders’ meeting was the last to be held in Madrid, as the registered office will be returned to the Basque Country.
Talgo stated following the shareholder decision that the company had been engaged in a complex corporate process for over two years, stemming from its major shareholder’s decision to divest its stake. The company added that this period of uncertainty had negatively impacted its operations, management, and competitive position.
“In February [date unspecified], a preliminary agreement was announced between the former majority shareholder and a Basque industrial consortium (the ‘Consortium’) for the transfer of the stake for sale. This agreement, strategic for the continuation of the business project, is being implemented and opens a new chapter in Talgo’s history,” the company said in a statement.
