The Spanish government will finally have to take over the nine toll motorways that are currently bankrupt for an estimated cost of €5 billion (US$5.3 billion).

According to sources, there are very few possibilities to reach an agreement with the banks for the rescue of the projects to avoid their closure.

As we reported in late September, Spanish Ministry of Transport and Public Works was working "in extremis" to prevent the closure of the R-3 and R-5 radial highways developed under the concession model.

The Ministry begun intense negotiations with the consortium in charge of the concession in order to ensure continuity of the highways services. The consortium is formed by Abertis, which has a 35% stake in the concessionaire (Accesos de Madrid). Sacyr owns 25% and Bankia and ACS 20% each. 

As we reported in May, the Commercial Court number 6 of Madrid, Spain, stated that the radial highways R-3 Madrid-Arganda and R-5 Madrid-Navalcarnero, and the Alicante bypass highway would close to traffic on October 1, 2106 if the Spanish Infrastructure Ministry (Fomento) does not assume the management of roads before that date. According to sources, the government achieved an extension until July 2017 to avoid its closure to traffic.

The Alicante bypass highway concessionaire (Ciralsa) is controlled by ACS, with 50%, and by Abertis and Globalvia, with 25% each.

In mid June we informed that CaixaBank sold the debt from R-3 Madrid-Arganda, R-5 Madrid-Navalcarnero and Alicante bypass to distressed investors. According to sources, the bank sold approximately €100 million (US$112.5 million) of debt to Taconic Capital.

The nine toll roads in bankruptcy are namely:

• 4 radial highways in Madrid, R-2, R-3, R-4, and R-5
• Alicante bypass highway
• M-12 Barajas Airport - Madrid highway
• Madrid - Toledo highway
• Cartagena - Vera highway
• AP-36 Ocaña - La Roda

In 2014 the Spanish government announced plans to group the bankruptcy road concessions under the same vehicle which would have a total debt of €3,800 million. After this process, the government aimed to get a debt haircut of 50% and refinance the rest with the launch of 30 years bonds. Spanish banks including Banco Santander, BBVA, La Caixa, Banco Popular, Sabadell and Bankia, were willing to accept the discounts but the Association of Spanish contractors (Seopan), whose members own most of the concessions, rejected this solution.