Second Battle of the Ebro

Spain's stooped and shriveled Juan March has come a long way since the days of his penniless youth when he earned his first pesetas by smuggling tobacco. He did not learn to read or write until his late 40s, but he had a flair for figures. He multiplied his first stake into a fortune (estimated at $100 million to $200 million), gained mastery over scores of Spain's chief industries and banks, and helped finance Franco's rebellion.

Last week, at 70, Juan March (rhymes with park) staged one of the most audacious strokes of his audacious career. He snatched Spain's biggest public utility, the $250 million Ebro Irrigation & Power Co., Ltd., away from an international electrical combine run by a U.S. businessman and partly financed by U.S. and British investors.

Mystery Man. To grab Ebro, Juan March had to outwit and outfight a foe as powerful, mysterious and secretive as himself: Dannie N. (for Nusbaum) Heineman, who, at 78, looks startlingly like the late J. P. Morgan, has some of Morgan's mania for collecting (he owns a collection of original manuscripts of De Maupassant, Mozart and Goethe).

Obsessively shy, Heineman has always wrapped his affairs in such obscurity that few but the world's top bankers have ever heard of him. When in Manhattan, he lives in a nine-room apartment in a quietly elegant midtown hotel. Born in North Carolina, Heineman went to Europe at 16 and stayed there almost half a century building electric tramways and power plants (including Ebro) in a dozen countries, with U.S., British, Belgian, Swiss and French capital.

He has kept control of them through two World Wars and innumerable political upheavals by means of a bewilderingly complex holding company, incorporated in Belgium, called SOFINA (Societe Financieere de Transports et d'Entreprises Industrielles)* The value--and power--of SOFINA is Heineman's secret. But its five-year battle with March over Ebro makes E. Phillips Oppenheim's stories read like fairy tales. Says Dannie Heineman, with icy anger: "I'm no angel, but I've always been a builder. Juan March has always grabbed what he wanted. He wanted Ebro, and he grabbed it."

Blocked Profits. Ebro is the principal source of electricity for Spain's chief industrial region, the whole of Catalonia and the Ebro valley where the Spanish Loyalists made one of their last great stands. Since 1910, Ebro had dutifully paid out profits to its owner, the Canadian-incorporated Barcelona Traction, Light & Power Co., Ltd., a subsidiary of SIDRO, in turn a subsidiary of Dannie Heineman's Sofina.

The civil war blocked all currency exchange, and at war's end Franco refused to unblock Ebro's profits. With Barcelona Traction helpless to get at them, it fell far Dehind in interest payments on its sterling bonds. The bond prices tumbled, and Juan March started buying them up at bargain rates.

By 1944, he was ready to strike his first blow. March called on Heineman in Madrid and warned that he had better let him take over Barcelona Traction, in return for a minority interest, or suffer the consequences. Heineman refused.

Three years later, March sent an emissary to Heineman in Manhattan with a new ultimatum: if he would not yield Barcelona, he could expect blows at CHADE, another SOFINA subsidiary in Spain. CHADE, though it owned no interests in Spain, used a Madrid office to collect the profits from the huge power interests it owned in Argentina (CADE). Heineman hastily moved CHADE to Luxembourg, where it transformed itself into SODEC (an identity it had used in a previous move to save its financial skin during Spain's civil war).

Unable to strike at CHADE, March turned his attention again to Barcelona Traction. In February 1948, an obliging judge in the small Catalonian town of Reus declared that, since Barcelona Traction had not paid the interest on its bonds, it was bankrupt. Franco's authorities moved in, evicted Barcelona Traction's officers from their Barcelona headquarters, and ushered in Juan March's.

The Big Grab. Dannie Heineman, whose friends and associates include such bigwigs as Herbert Hoover, Spain's Duke of Alba and Britain's Viscount Swinton, prevailed upon Belgium and Canada to protest March's actions. Franco, who had praised March for his "audacious nationalism," brushed them off.

Last week, Juan March went again to Reus and struck the final blow. By authority of last year's bankruptcy decision, he led a meeting of Barcelona Traction creditors (i.e., himself, the principal bondholder) and appointed the requisite "syndicos" (his agents) to dispose of Barcelona's assets. Nobody doubted who would get them.

In Manhattan, Dannie Heineman shook his head in amazement at what he called Franco's "stupidity" in letting Old Smuggler March go so far. Said Heineman: "This will not only cost Franco all the confidence and all the credits he hoped to get, it will scare all U.S. capital from investment anywhere in Europe."

* With major holdings in some 50 U.S. and foreign power companies, the more important of which include: Campania Argentina de Electricidad (CADE), which operates light & power plants in the Buenos Aires area; Mexican Light & Power, Ltd.; Belgium's Societe d'Electricite de Rosario; Portugal's Compagnies Reunies Gaz et Electricite; and, in the U.S., the Public Service of of Indiana, Inc. and Central Illinois Public Service.

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