The Barcelona Traction Light & Power Co. Ltd.

By Howard Shakespeare

Published in print (with additional illustrations) in the Journal of the International Bond & Share Society, Summer 1987

Copyright ã International Bond & Share Society 2001

Most collectors must be familiar with the black and red certificates for ordinary shares, and perhaps also with the blue preference shares of the Barcelona Traction Light & Power Co. Ltd., but there are also bonds extant. There could be more types to come to light also, as some of the known issued paper has yet to be seen.

The company was incorporated in Canada in 1911, to acquire interest in various electricity generation and tramway operations in and around Barcelona. It created a wholly-owned subsidiary, the Ebro Irrigation & Power Co., to exploit a permanent concession for hydro-electric power on the Ebro and two lesser rivers, and to supply the power to the city of Barcelona. It also acquired substantial interests in other electricity undertakings in the area. In the tramway field, it acquired the Barcelona-Sarria line, for extension to the important industrial centres of Tarrasa & Sabadell, and in 1913 a major interest in, and operational control of, the Belgian company, Tramways de Barcelone, and its subsidiaries.

By 1914 the company was in trouble. Heavy expenditure on development had left it unable to meet interest payments, and an arrangement was made to issue income bonds in lieu of interest payments, for the period 1914 to 1918, and further arrangements were needed in 1918, 1921 & 1924.

In 1924 the majority of the company’s first bond issue, held by a group of financiers, mainly Belgian, was converted into new preference shares, which with 60,000 existing preference and some ordinary shares held by them, gave them a controlling shareholding, which was vested in a new company, Sidro (Société Internationale d’Energie Hydroélectrique). The new company was controlled by Alfred Loewenstein, a flamboyant financial figure of the 1920s, who died in 1928 when he mysteriously vanished from his private aircraft while flying over the English Channel.

In the mid-1920s the company sold off all its tramway operations and became purely an electricity generation and distribution company, supplying at the peak over 80% of power consumed in Barcelona and the whole province of Catalonia.

In 1936, at the outbreak of the Spanish civil war, the business, funds and banking accounts of all the operating companies were seized by a « Workers" Committee ». At the end of hostilities, in 1939, the management was authorised to take possession of its property and to reestablish the electrical services. However, the neglect and mismanagement of the years 1936-1939 had badly harmed the company. It never paid any further interest or dividends on its paper, and so when in 1948 a company called Fenchurch Nominees Ltd. offered to buy outstanding bonds of the 5.5% & 6.5% issues, it was able to acquire a goodly number of them fairly cheaply. Armed with these, Fenchurch’s principal, Juan March, a Majorcan financier of wily and ruthless nature, obtained a declaration of bankruptcy of the company in the provincial court of Catalonia, in Reus.

In 1952 the assets were auctioned off, the only approved bidder being Fuerzas Eléctricas de Cataluna S.A., controlled naturally, by Juan March, who is reckoned to have acquired them for about 1 per mil of their true value. This company agreed to repay outstanding funded debt of the company in sterling in London, and unpaid interest coupons in pesetas in Barcelona. The shareholders, however, were not so fortunate ; in spite of an action being brought before the International Court of Justice, they never received any return of capital. A fairly small number of additional ordinary shares was issued in the 1950s & 1960s, in Toronto ; the reason is not readily apparent.

In July 1974 by Judicial Sale under supervision of the Supreme Court of Ontario, all the undertaking, property and assets were sold ; there was no return to shareholders. In August 1974 the London stock exchange listing of the company’s shares and bonds was cancelled.

Copyright ã INTERNATIONAL BOND & SHARE SOCIETY 2001

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