Spanish firms hopeful about post-Chavez corporate era
MADRID, March 6 (Reuters) - Spanish companies with big business in Venezuela are hoping that a post-Chavez era could open up industrial and banking sectors that have until now been deeply regulated.
Telecoms firm Telefonica, bank BBVA, oil major Repsol and retailer Inditex are the biggest Spanish firms in Venezuela, one of the former Latin American colonies helping their revenues in tough times at home.
Under Hugo Chavez, who died on Tuesday, foreign firms in Venezuela battled price controls and currency devaluations along with persistent threats of nationalisation and were unable to bring home dividends.
Spanish companies suffered their worst moment in Venezuela in 2007 when Chavez threatened to take over their businesses in a row sparked by King Juan Carlos telling the Venezuelan leader to "shut up" during a summit.
But investors and firms believe his absence may now trigger a shift toward market- and consumer-oriented economic policies, even if he is followed by his chosen successor Vice President Nicolas Maduro in forthcoming elections.
OPPORTUNITIES
"We don't expect things to get any worse without Chavez and there's a slight chance for more liberalization," an executive from one Spanish company heavily involved in the country said.
Spanish firms in Venezuela, which also include media group Prisa and insurer Mapfre, will be closely watching the race between Maduro, a 50-year-old former bus driver and union leader, and his likely opponent Henrique Capriles, governor of Miranda state.
"If Maduro wins we could see a more radical form of 'Chavismo' with more expropriations. If the other candidate wins, there could be opportunities for Spanish companies," said Robert Tornabell, a professor at Spanish business school ESADE.
Spanish bank Santander, seeking to exit the heavily regulated market, sold its holdings to Venezuela's government in 2008 after Chavez blocked the sale to a private investor.
Repsol has invested millions in oil and gas projects in Venezuela and in 2010 signed a joint venture with the Chavez government to develop oil reserves in the Orinoco Oil Belt, one of the world's largest undeveloped hydrocarbon deposits.
The project is expected to boost Repsol's net reserves by an estimated 134 million barrels of oil through 2014 and a further 134 million barrels between 2015 and 2019.
"If there is a change in government this might be viewed positively for foreign companies operating in Venezuela given expectations for a more favourable foreign exchange regime and the prospect of being able to repatriate profits," said Flemming Barton, analyst at CM Capital Markets in Madrid.
Telefonica and BBVA complained for years of not being able to repatriate dividends, and Chavez threatened to nationalize BBVA's subsidiary Banco Provincial, which contributes a quarter of the bank's Latin American revenues, for not lending enough to agricultural projects.
Telefonica is market leader in Venezuela, which contributes around 7 percent of the group's operating income, but wrote down the value of its entire Venezuelan arm by 417 million euros after the devaluation of the bolivar early this year.
(Additional reporting by Paul Day, Clare Kane, Sarah White and Tomas Gonzalez; Editing by Julien Toyer and Helen Massy-Beresford)