Millionaire pact between Villar Mir and the ex-CEO of his electricity business to seal his exit

The Villar Mir family has taken advantage of the Spanish proverb, which advises a bad deal rather than a good lawsuit. According to several sources, the family that owns what was once one of the largest holding companies in the country has signed a pact with María Luisa Huidobro, the former CEO of its Energy division, to avoid a trial that was to be held next week. Although the parties have declined to specify the amount of the indemnity, the group had made a provision of almost two million to cover this cost.

Huidobro was fired and dismissed from her position as CEO of Villar Mir Energía on July 29, 2022, just as she was starting her summer vacation and after leaving on track the sale of a substantial part of its photovoltaic and wind assets to Renovalia for about 200 million euros. Specifically, 276 megawatts of installed capacity. The signing of the transaction took place on August 12, barely two weeks after his forced departure, a divestment that allowed the Villar Mir subsidiary to close the year with a record profit of 143 million.

After his dismissal, Huidobro filed two lawsuits against Villar Mir Energía. One for unfair dismissal in the 24th Social Court of Madrid, and the other to claim compensation before the 35th Social Court of Madrid. Although the parties held a conciliation meeting, they did not reach an agreement, which is why the company, for accounting prudence, made a provision of 1.9 million euros in case both processes were closed unfavorably for its interests. The figure compares with the 2.8 million that OHLA, of which the Villar Mir family were shareholders until last spring, has decided to pay to its former CEO José Antonio Fernández Gallar.

The trial date for the dismissal was set for September 26th. But, after several meetings with the positions far apart, at the end of July, the Villar Mir and Huidobro reached a meeting point by which they paid compensation to the executive to finally avoid going to court. Both the company and the executive, who spent 12 years at the head of the family's energy business, have declined to comment on the amount agreed. Other sources indicate that it is very close to the amount provisioned in the group's accounts, so it is around two million euros.

However, it would be a figure higher than the two annuities that are usually paid in this type of senior management dismissals, since other sources familiar with the group say that Huidobro's salary would logically be between half a million and 600,000 euros. Huidobro also headed the group's electricity and gas trading company, Energya VM. He had to overcome some complicated situations. It was one of the few energy sales companies to declare an ERTE after the pandemic broke out. This situation generated uncertainty among some key employees, who decided to leave the group.

Against this backdrop, the holding company embarked on the sale of the entire energy division, something it only half succeeded in doing, advised by Banco Santander, one of its creditors. Although F2i, in alliance with Crédit Agricole, and Grupo Villar Mir reached an agreement in principle for the sale of the trading company, after many months of study, it was not finally concluded. The Italian fund even announced the purchase of 40% with the right to the other 60%. However, after due diligences, the agreement between the parties was finally broken in 2023. In this period it was known that the CNMC sanctioned the company for benefiting from obtaining clients in an irregular way. Sources familiar with the operation point out that among the terms of the agreement, the exit of María Luisa Huidobro was set as a precondition for the sale. This cessation was also demanded by another of those who were interested in the acquisition.

A member of the senior corps of commercial technicians and economists of the State, María Luisa Huidobro was general director of Energy in the Ministry of Industry between 1990 and 1997 and was vice-president of Red Eléctrica de España. Before joining Villar Mir Energía in 2009, she held the presidency of OMEL (Electricity Market Operator). In addition, during part of the time she headed the Villar Mir energy division, she was president of ACIE, an association of independent electricity and gas marketers.

After the transfer to Renovalia, Villar Mir Energía has a portfolio of approximately 400 megawatts, mainly wind power. Its strategy involves the development of various renewable energy projects that form part of the portfolio of projects in an advanced stage of processing. Among them, the reversible hydroelectric plant of Los Guájares, in the province of Granada, stands out.

The family has yet to resolve another relevant legal matter. In this case, the lawsuit filed by Mohary Hospitality, the investment vehicle controlled by Mark Scheinberg, the founder of PokerStars. The Israeli investor, owner of 50% of Centro Canalejas, the luxury complex located in the heart of Madrid, has taken legal action against Villar Mir and OHLA, owners of the remaining 50%, due to disagreements in the management.

The Villar Mir family has invoked the Spanish proverb, which advises a bad deal rather than a good lawsuit. According to several sources, the family that owns what was once one of the largest holding companies in the country has signed a pact with María Luisa Huidobro, the former CEO of its Energy division, to avoid a trial that was to be held next week. Although the parties have declined to specify the amount of the indemnity, the group had made a provision of almost two million euros to cover this cost.