Spain’s CAF Cuts Stake in Mexican Rail Venture

Spain’s rail operator Construccion y Auxiliar de Ferrocarriles (CAF) has reduced its stake in Mexico’s Ferrocarriles Suburbanos (FFSS) project to 43% from 85% in a restructuring that increased the Mexican state’s participation in the venture. Through a capital increase, CAF managed to decrease its stake, while Mexico’s Fondo Nacional de Infraestructura (Fonadin) came in as a shareholder with 49%, CAF says. CAF’s stake reduction takes place in the form of an adjustment of a credit balance in favor of Fonadin, but no details of the amounts were released. Under the deal, Fonadin will also add MXP2.34bn ($170.7m) to increase the FFSS debt contingency fund, while the FFSS rail concession is extended until 2050. The number of users on the FFSS rail project averages 130,000 a day, and is far below an original estimate of as much as 300,000 a day. This has made it harder for the partners to recover their investment. In July 2006, FFSS closed a $271 million syndicated loan led by Banesto, Santander and Banobras to complete the first stretch of its Mexico City train project. The total cost of the project was estimated at $613 million.