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 News Around the Republic of Mexico | February 2006 
$1 Billion is Raised from Sale of Government Stake
 Diane Lindquist - Union-Tribune
| | Mexico raised about $1 billion from its largest initial public offering in a decade with the sale of the government's 85 percent stake in Grupo Aeroportuario del Pacifico. |
Mexico raised about $1 billion from its largest initial public offering in a decade with the sale Friday of the government's 85 percent stake in Grupo Aeroportuario del Pacifico, the enterprise that runs Tijuana International Airport and 11 other central and northwestern Mexican airports.
The stock took off rapidly. Investor demand in the airport group known as GAP prompted underwriter Credit Suisse First Boston to market the offering at a higher range than initially planned.
Shares opened Friday at $30 on the New York Stock Exchange, up 43 percent from the IPO price of $21 a share. Yesterday, the stock closed at $28.95. Shares also are being traded on the Mexican Bolsa.
At a news conference in Mexico City yesterday, Rodolfo Salgado, who oversaw the second phase of the GAP airport privatization for the Ministry of Communications and Transportation, said the proceeds will be used to upgrade and expand highways.
It's obviously been a successful IPO, said Ralph Nieders, a San Diego consultant who once worked for GAP's private operators, Aeropuertos Mexicanos Pacificos, to promote a cross-border terminal or trans-border airport that would be linked to Tijuana International Airport.
GAP's 482-page prospectus made no mention of such a project, which recently received revived support from the San Diego Regional Chamber of Commerce's Mexico Business Center and local real estate magnate Malin Burnham, who is working to bring the 2016 Summer Olympics to the San Diego-Tijuana region.
If the prospectus had mentioned the possibility, it might have enhanced the value of the stock, Nieders said.
Nevertheless, the filing dealt with numerous current and future problems the enterprise faces.
They did disclose all the particulars the good and the bad, said Nieders, whose ties to the operation were severed four years ago. The investors are fully aware of what they're investing in.
Although the company operates 12 airports, including those at Guadalajara, Puerto Vallarta and Los Cabos, several of the issues involve Tijuana International Airport.
Among them is a dispute with Ejido Tampico, the Tijuana communal group whose property the government seized to build the airport more than three decades ago. Never compensated, the group continues to seek payment as well as occupy portions of the property, posing a security risk and making it difficult to expand airport operations.
A similar dispute is ongoing at the Guadalajara airport.
Another issue involves an ongoing court case over property taxes that the city of Tijuana claims it is owed. In the prospectus, GAP said it plans to post a bond to cover the taxes if a final ruling goes against it.
An ongoing dispute over replacing shop and restaurant operators at the Tijuana airport has been nearly resolved, the filing indicated, saying that settlements have been reached with all parties except the operator of the parking structure.
Attempts to reach the concessionaires yesterday were unsuccessful.
Proceeds from such operations contribute to the bottom line, but GAP earns most of its profits from fees charged to passengers and airlines for use of the airports.
From 2000 to mid-2003, the principal domestic airlines operating at the 12 airports Aeromexico, Mexicana, Aeromar and Aerolitoral refused to pay price increases in the user fee. The dispute has been resolved, but it illustrates resistance Grupo Aeroportuario could face in the future from airlines.
In 2004 and the first nine months of 2005, Tijuana International Airport, the country's fifth busiest, represented 47.7 percent of GAP's terminal passenger traffic and 44.3 percent of the company's total revenue.
All together, GAP in 2004 had revenue of $203 million and net income of $35.9 million.
The company is expected to pay out a two-layered dividend to investors. A fixed annual distribution will total about $45 million this year and is expected to rise gradually in future years. The second component will pay out any cash or temporary investments held in excess of the company's minimum cash balance.
Aeropuertos Mexicanos Pacificos received an outsized amount of corporate control when it acquired 15 percent of GAP stock in the first phase of the airport privatization eight years ago. It has the ability to appoint and remove the chief executive, the chief financial officer, and the chief operating officer as well as elect four members to the board, designate 20 percent of the members of each board committee, and to veto certain actions requiring stockholder approval, including the payment of dividends.
Bloomberg and Dow Jones news services contributed to this report.
Diane Lindquist: (619) 293-1812; diane.lindquist@uniontrib.com |
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