Javer Picks Up ICA Homebuilding Assets

Mexico’s Javer has agreed to acquire homebuilding assets from ICA’s ViveICA unit, Javer says. The deal value was not disclosed, but ICA is to exchange the assets and their operating liabilities for a 23% stake in Javer. Javer also takes on responsibility for refinancing MXP600m ($46m) in project debt, and notes that it expects to use a multi-year term loan for financing at first, before replacing it in the bond market. Javer adds 20 developments in Baja California, Veracruz, Hidalgo, Guanajuato, and Quintana Roo, representing all of ViveICA’s assets apart from those in Peru, Ciudad Juarez, Chihuahua and a luxury apartment building in Distrito Federal. Following the deal, ICA becomes Javer’s third-largest shareholder and gets two seats on its board of directors. The new company is expected to generate positive cash flow after the deal, which is set to close at the end of first quarter 2013, pending regulatory approvals. Creel, Garcia, Cuellar, Aiza y Enriquez advised Javer, while Galicia Abogados and Goldman Sachs advised ICA. In a report, Barclays calls the transaction positive for Javer, noting an improvement in scale and geographical diversification.