Category: Regions

Private equity shop Advent is rumored to be investing about $49m in bankrupt airline Mexicana. Advent did not return calls for comment. A spokesman for the pilot union does say, however, that it is in negotiations with several potential investors to “save the airline,” but declines to name them, citing confidentiality agreements. He explains that for a period of 100 days, the pilot union will be negotiating routes, fleet and working conditions, among other things, with potential investors. Pilots hold a 5% stake in Mexicana, a participation that a union member describes as, “worthless.” “The Posadas Group that controls the airline has practically dismantled [the airline] in the past 4 years,” he alleges. The union official adds that “the group created 16 other companies to which it has been transferring Mexicana’s assets.” Some of those companies are MexicanaClick and MexicanaLink, he claims.

Alejandro Werner has resigned as Mexico’s undersecretary of Hacienda y Credito Publico, according to local press. He is expected to be replaced by revenue undersecretary Jose Antonio Meade, who will be replaced by Jose Antonio Gonzales Anaya, according to local press speculations. “Replacing undersecretary Werner is an extremely difficult task, because of his strong academic background, vast experience in the Mexican public sector, and strong credibility in international financial markets,” say analysts at Goldman Sachs’ EM economic research team. However, they add that both likely replacements – Meade and Gonzales – have strong public sector experience so, if confirmed, would be good appointments. Werner’s brother Martin runs Goldman in Mexico. A spokesperson for the finance ministry declines to comment on the expected departure.

Red de Carreteras de Occidente (RCO), the concession holding road assets won in the landmark 2007 auction known as Farac I, plans to raise up to MXP3.16bn in equity. The concession controlled by ICA and Goldman Sachs will issue up to 3.54bn shares through a rights offering to existing holders, set for September 8. RCO raised MXP6.55bn in October 2009 through the sale of certificados de capital de desarrollo (CCDs), the first placement in that asset class.

Mexican building supply conglomerate Elementia has filed a shelf to issue up to MXP5bn in debt. It is looking to issue a bond in the local market in the coming weeks, according to a spokesperson for the company. Inbursa and Arka are managing the sale, though the date and size of the issue have not yet been determined. Elementia will not be doing a roadshow because it is a local deal, adds the spokesperson, though 3 main investors that LatinFinance spoke to about the transaction say they are unfamiliar with the credit. The issuer was due to sell $400m in 2020 bonds in May after meting with US and UK investors, though pulled it along with the region’s other DCM hopefuls when global markets took a tumble.

Mexico telecom Maxcom, which is said to have hired Barclays to advise on a sale of the company, says it is “evaluating strategic options for its future” and is having “conversations with different participants in the market.” Research shop Banif-Ixe says that given the company’s cash problems, the company may be looking for a partner to inject capital and boost growth. The shop believes a sale of the entire company is a possibility and that the eventual buyer could pay a higher multiple than the one at which the share currently trades. At the close of the last session, the share traded at a 2010 estimated P/BV of 0.5x and an EV/Ebitda 10e of 6.0x. Telemar, Televisa Megacable Telefonica, Vivendi and Axtel are said to be potential bidders. Banif-Ixe adds that since regulation does not allow a foreign investor to hold more than 49% stake of a Mexican company, a foreign buyer would be limited to minority participation. Barclays is heard to be leading the process. A price of $400m-$500m is rumored, including debt.