FCC has announced that Alpine, the subsidiary of FCC Construcción for Central and Eastern European markets, decided on Wednesday to present a voluntary declaration of insolvency before the competent Austrian courts in view of the impossibility of discharging its obligations.

According to FCC, the decision comes as a result of both delays in the divestments planned by Alpine and the steady deterioration in the trading situation since the first quarter of 2012. The parent company, FCC, already included  losses in Alpine amounting to 420 million euro in its 2012 consolidated accounts.

The lack of consensus with all financiers with regard to the necessary readjustment has led to this decision.

FCC also states that the situation recommends provisioning the whole of Alpine's assets in the FCC's consolidated accounts, which will result in an after-tax charge amounting to 289 million euro in this year's consolidated profit and loss account. Net financial debt associated with Alpine amounts to 625 million euro in the first quarter.

This event will not affect materially the goal of the current Strategic Plan, where the objectives are to boost operating cash flow, enhancing operating efficiency and reducing debt.

Under this Strategic Plan, FCC reached an agreement to in early June to sell its 50% stake in Proactiva Medio Ambiente to French multinational Veolia Environnement for €150 million with capital gains of 81 million euro. The Strategic Plan includes a series of divestments (including Proactiva) with a view to reducing Group debt by 2.2 billion euro.

Source: FCC