City temporarily not VCF guarantors

A judge in Valencia has temporarily suspended the city council’s position as guarantor for Valencia majority shareholders Fundacio VCF’s debt with Bankia.

The majority shareholders at Mestalla have their 72.5 per cent shareholding in the club up in the air after failing earlier this year to meet a €4m interest payment on the 2009 €81m loan taken out with Bankia, to fund their original takeover.

Bankia and the city authorities have been in dispute over the legality of the latter acting as guarantor, as originally agreed in 2009.

Now, in the same week as the European Commission announce an investigation into the city providing illegal state aid to Valencia through agreeing to act as guarantor, the judge overseeing the dispute between Bankia and the city of Valencia has temporarily suspended such a role for the city over Fundacio VCF’s debt, with Bankia in agreement.

Tags Bankia EC European Commission Fundacio VCF