Private Equity News & Analysis

Goldman and ICA list Mexican road trust

The firms have placed 6.55bn pesos of equity for a 32% stake in Mexican toll road operator Red de Carreteras de Occidente, through a new investment vehicle designed to encourage institutional investors to provide finance to infrastructure projects.

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Goldman Sachs Infrastructure Partners and Mexican construction group Empresas ICA (ICA) have sold a stake in a group of toll roads in Mexico through a share issue.

Goldman and ICA have placed 6.55 billion pesos (€328 million; $483 million) of equity-linked notes through a trust fund on the Mexican Stock Exchange for a 32 percent stake in Red de Carreteras de Occidente (RCO), the largest toll road operator in Mexico and the concessionaire of the FARAC 1 road package.

ICA said in an announcement to the stock exchange that RCO will use part of the proceeds to pay down its debt.

RCO is operator
of the FARAC 1
project
Goldman and ICA – RCO’s original shareholders – have also committed to subscribe to new series A shares in RCO, equivalent to around 2 billion pesos. Goldman and ICA are set to subscribe to 80 percent and 20 percent of the new series A shares respectively, according to the stock exchange filing. Following the transaction Goldman will own 54.5 percent of RCO, ICA 13.6 percent and the balance of 31.9 percent belonging to the new issuing trust.

The new trust fund shares were priced at 0.77 pesos each. The shares were issues as Certificados de Capital de Desarrollo de Infraestructura a largo plazo, or CKDes, a new kind of security class structured to be acquirable only by institutional investors in the Mexican market, particularly public pension fund managers.

Last month Goldman Sachs Infrastructure Partners became the largest shareholder in Channel Tunnel rail link operator Eurotunnel after opting to swap its deferred equity securities for a stake in the company.