(Adds details on how FCC will use the funds)
MADRID, Nov 20 (Reuters) - Shareholders of Spanish builder and services provider FCC approved on Thursday a 1 billion euro ($1.25 billion) rights issue which will raise funds for the company to pay down high-interest bearing debt and cut costs.
FCC said it would use 765 million euros of the funds to pay down a part of a syndicated loan with high interest rates. The rest of the funds will be used to pay debt at its units Cementos Portland Valderrivas and FCC Environment.
The capital hike will pave the way for the investment vehicle of U.S. billionaire George Soros to become a major stakeholder in the company when it takes on the rights of key shareholder Esther Koplowitz to buy stock in the operation.
As a result, Koplowitz will see her share of the capital reduced to around 25 percent from just above 50 percent currently.
FCC, like fellow Spanish builders, has sold non-core assets, laid off staff and restructured borrowings to pare down its balance sheet following a 2008 property bust which pummelled earnings and left many construction companies with huge debts.
FCC will use the majority of the capital to reduce a 1.4 billion euro loan by 900 million euros. Its bank lenders have agreed to take a 15 percent hit on the loan to help the company pay it off.
The remaining 490 million euros of this loan will have its interest rate reduced to 5 percent from an average of 13.5 percent, implying financial cost savings of 160 million euros, the company said.
The rights issue is likely to be priced on Friday. Shares were trading 3.6 percent lower at 14.7 euros at 1610 GMT on Thursday. (1 US dollar = 0.7971 euro) (Reporting By Sonya Dowsett; Editing by Julien Toyer and Susan Thomas)