Mexico readies IPO for airport company
http://www.signonsandiego.com/news/mexico/tijuana/20040617-9...
By Diane Lindquist
June 17, 2004
The Mexican government plans to offer U.S. and Mexican investors a chance to buy into the company that operates 12 northwestern Mexican airports,
including Tijuana International Airport.
An initial public offering of the government's 13.6 billion shares of stock in the Grupo Aeroportuario del Pacifico, or GAP, operating company is
expected to be floated simultaneously on the New York Stock Exchange and the Bolsa Mexicana de Valores in 15 to 30 days, a spokesman for the Mexican
stock market said yesterday.
GAP is one of three investment groups that bought a small amount of stock and a 50-year concession to operate the 12 northwestern airports when Mexico
privatized 34 of the country's biggest airports in the late 1990s.
Last year, the 12 GAP airports handled 17.8 million passengers. The company posted a profit of about $26 million and reported earnings before
interest, tax, depreciation and amortization of $100.8 million.
Controversy has dogged the Mexican and Spanish operators of GAP in their nearly six years at the helm of the company. Numerous Mexicans, including
several members of the national congress and two state governors, have at some time called on President Vicente Fox to revoke the operating contract.
The company has been accused of failing to live up to its promise to transform the facilities, which include airports in Guadalajara, Cabo San Lucas,
Puerto Vallarta and Leon, into 21st century transportation hubs within five years. Some have accused GAP of fiscal and operational mismanagement.
GAP executives in Mexico City and Guadalajara could not be reached for comment yesterday.
The prospectus for the GAP initial public offering indicates that GAP has surpassed its commitment to invest money to upgrade the facilities.
According to Tijuana airport manager Guillermo Villalba Morales, $25 million has been spent at the airport, extending both wings to accommodate six
more gates and adding check-in counters and two VIP departure lounges.
Much of the discord surrounding GAP has centered on Tijuana International Airport. After taking control, GAP executives said they planned to invest in
an air cargo facility and a terminal across the border in Otay Mesa to attract U.S. air passengers. Neither has been built.
The cross-border terminal "was one of their top priorities. But when push came to shove, they walked away from it," said Ralph Nieders, a U.S.-Mexico
business consultant who spent more than a decade promoting the concept.
Two years ago, Tijuana airport manager Morales was charged with a felony for allegedly intimidating and harassing shop and restaurant operators in the
terminal. Villalba says the case has been settled; others say it has not.
Meanwhile, members of the communal group Ejido Tampico stepped up efforts to be paid for land the government expropriated in the 1970s to build the
airport.
Under risks, the GAP prospectus notes that the ejido's legal action could affect the operation and expansion of the Tijuana airport.
The Mexican government gained $261 million from the 1998 sale of the operating concession and 15 percent of GAP stock. It retained its 85 percent
share in a trust account at the government development bank, Nacional Financiera.
Plans to float an IPO for GAP were postponed in 2001 after the Sept. 11 terrorist attacks caused a slump in international air traffic.
The year before, the government sold 74 percent of its stake in the 12-airport southeastern group Grupo Aeroportuario del Suresteon on the Bolsa and
NYSE, and it plans to sell its remaining 11 percent stake this year. The stock closed slightly up at $18.68 yesterday.
The other 10 privatized airports are part of the North Central group, based in Monterrey.
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