Shares of OHLA, a Spanish construction company, experienced sharp declines of nearly 10% on the stock market after news broke that it must pay guarantees amounting to approximately €39.8 million ($43 million) to Kuwait. This obligation arose from an arbitration decision related to a road construction contract in the Middle Eastern country.
As a result of today’s downturn, OHLA’s market capitalization has again fallen to around €500 million. Investors reacted negatively, pushing shares down significantly, reflecting concerns about the company’s financial health following the adverse ruling.
In addition to the immediate financial impact, OHLA remains vulnerable due to an unresolved claim from Kuwait that could potentially cost the company an additional €300 million. This ongoing litigation poses further risks, complicating OHLA’s financial outlook, according to information provided by Europa Press.
The recent arbitration decision means OHLA’s liquidity will take an immediate €39.8 million hit through guarantees. However, this setback contrasts with a favorable ruling OHLA received a few weeks ago concerning another dispute, related to a metro construction project in Qatar, which awarded the company approximately €100 million.
OHLA’s stock has been under pressure for the past week amid speculation surrounding the Kuwait arbitration outcome. Rumors had already hinted at an unfavorable decision last Friday regarding the appeal filed by a joint venture involving OHLA and Italy’s Rizzani de Echer. Since last Tuesday, shares have accumulated a total decline of around 20%, an impact not mitigated even by securing a new contract in the Czech Republic.
New Infrastructure Project in the Czech Republic
Specifically, OHLA, as part of a consortium alongside Germany’s Hochtief (an ACS subsidiary) and Austria’s Swietelsky, secured a contract worth approximately €130 million to construct a junction between highways D1 and D2 in Brno, Czech Republic. Construction is scheduled to begin in autumn 2025 and will last for 840 days, according to the Czech Ministry of Transport.
Boardroom Tensions and Governance Issues
Shares were further pressured due to internal disputes within OHLA’s board of directors. The board, still led by the Mexican Amodio brothers, recently saw new shareholders, including José Elías (Audax), enter after a capital injection totaling €150 million.
Industry sources informed Europa Press that there are divergent opinions regarding a previously planned issuance of €50 million in convertible bonds as part of the recapitalization strategy. The Amodio brothers oppose diluting minority shareholder interests and advocate for a bond issue accessible to all shareholders. In contrast, newer investors favor convertible bonds with preferential subscription rights.
Nonetheless, the convertible bonds represent only one financing option, and OHLA is currently under no immediate pressure to utilize it, given its healthy cash reserves nearing €100 million—enough to cover the Kuwaiti payment obligation.
Board Member Review and Legal Concerns
Additionally, OHLA’s board of directors might undergo significant scrutiny following a review requested by its Nomination and Remuneration Committee. The focus is particularly on the company’s CEO, Tomás Ruiz, who reportedly faces multiple legal issues in Mexico, as first disclosed by “El Confidencial” this Monday.
The Committee has requested a formal assessment to verify if Ruiz, who was appointed CEO in October 2024, fulfills the governance requirement of not having active criminal cases that could harm OHLA’s reputation. Furthermore, the company reportedly filed a complaint alleging insider trading against a board member closely associated with José Elías, adding to ongoing governance concerns.
