Category: Regions

Tenedora K, a company formed by Mexico’s Grupo Industrial Omega and Grupo Arizan, is acquiring a 95% stake in Mexicana de Aviacion, the two companies say, without disclosing what they are paying for the bankrupt airline. A source in the pilots’ union says the final price and conditions are still being discussed. The pilot union will keep its 5% stake. Advent International is acting as an intermediary, says a spokesman at the private equity shop, adding that the shop is not taking an equity stake in the airline. The two groups, who formed Tenedora K specifically for the acquisition, do not disclose the sellers, though Grupo Posadas is one, saying separately that it sold 30% of the airline’s holdco. Omega and Arizan did not respond to requests for comment. Omega is the holding company for companies including manufacturer Holzer and real estate operators Inmobiliara Coapa Larca, and Inmobiliara Castellanos. Arizan is primarily involved in real estate.

As expected by the market, Mexico’s central bank kept the monetary policy rate at 4.5%. The bank says that although manufacturing activity and exports are growing at an accelerated pace, this could be affected by a worsening economic outlook in the US. Bulltick thinks the bank will start tightening in H2 2011, with the rate ending 2011 at 5.25%. Barclays expects tightening to start in June 2011.

Moody’s has downgraded Mexico-based home developer Sare Holdings’ ratings to B2 from B1. It also changes the outlook to stable from negative. The ratings agency says the actions reflect the company’s continued operating profit and credit metrics weakening, specifically interest coverage and debt to Ebitda. Sare also has struggled with working capital issues related to its significant high-rise development of middle- and higher-income buildings, which continue to place pressure on the company’s receivables collection cycle. Debt/Ebitda was 6.13x for Q2, 5.65x for year end 2009 and 5.28x for year end 2008.

Mexico’s central bank is not expected to change its monetary policy rate of 4.5% in today’s meeting, judging by its cautious tone in the Q2 inflation report, according to Morgan Stanley. Bulltick thinks the bank will start tightening in H2 2011, with the rate ending next year at 5.25%.

Ernesto Cordero Arroyo, head of Mexico’s Hacienda y Credito Publico, has appointed Jose Antonio Meade Kuribrena to replace Alejandro Werner, who resigned as deputy finance minister, according to a statement issued by the ministry. It also confirms that Jose Antonio Gonzalez Anaya replaces Meade as undersecretary for revenue. Carlos Alberto Garza Ibarra, the former head of coordination with regions, will take over from Gonzalez. Ignacio Quesada Morales will replace Garza. He was previously a social development ministry official. Werner will be going to Spain to pursue academic opportunities, according to a source at Hacienda. Meade has previously been head of the Rural Credit Bank and the Rural Development Bank. Gonzalez was previously senior economist at the World Bank for Paraguay, Bolivia and Peru. Analysts at Goldman Sachs’ EM economic research team say taking over from Werner would be difficult because of his strong credibility in the financial markets, but said the replacements made were good appointments, because of their strong public sector experience.

Prudential Mexico has raised MXP3.7bn from the sale of Certificados de Capital de Desarrollo (CCDs) in Mexico’s domestic market, according to a source familiar with the deal, the largest CCD this year. The 10-year transaction supports a real estate fund making investments in industrial assets in Mexico during a 5-year period. The CCDs priced at MXP1 each, according to regulatory documents, and the deal offers a return profile in line with private equity industry standards. Investors get their initial investment plus a preferred return, in this case 12%, and proceeds are divided 80% to holders and 20% to Prudential. Prudential is heard putting MXP600m of its own capital into the deal. It had been aiming to raise MXP4bn, also including its own contribution. It is Mexico’s second real estate CCD, after a MXP3.3bn transaction from AMB closed last month, and the largest so far in that space. Prudential has raised 2 previous industrial funds in Mexico through traditional PE means, among 7 real estate funds totaling about $2.4bn in equity commitments. BBVA Bancomer managed the transaction. Also expected to close in the next 6 weeks are infrastructure fund CCDs from LatAm Capital Advisors and I Cuadrada.