"Mexico may issue IPO for group of airports"

Saturday, July 9, 2005

Mexico may issue IPO for group of airports 
Tijuana facility is one of a dozen in offering
By Diane Lindquist
The San Diego (CA) Union-Tribune


A Mexican official said yesterday that before year's end the government will
put forth an initial public offering of its shares in the Pacific group of
airports, which includes Tijuana International Airport. 

Rodolfo Salgado, who heads the Communications and Transportation Ministry's
department in charge of privatizations, told reporters that the government
expects to earn more than $600 million from the sale of its 85 percent share
in Grupo Aeroportuario del Pacifico, or GAP. 
 
"This is going to be the biggest private airport group in the Americas," he
told Associated Press and Dow Jones reporters in Toluca. 

News reports did not say when the government planned to issue the IPO.
Officials first planned to present the offering in 2001 but delayed it after
the 9/11 terrorist attacks. 

Last June, they again announced plans to sell the government's 13.6 billion
shares of stock in the GAP operating company on both the New York Stock
Exchange and Mexico's Bolsa de Valores, but the transaction did not occur. 

Reports of Salgado's comments also did not say where the IPO would be
floated. 

Representatives of the Communications and Transportation Ministry and Grupo
Aeroportuario de Pacifico could not be reached for further details. There is
no announcement of the sale on the government's Web site. 

The GAP operating company was created in 1999 as part of the Mexican
government's privatization of the country's major airports. A group led by
Spanish investors paid $260 million, with a promise to invest $140 million
more, for 15 percent of the shares and a 15-year license to operate the 12
airports in the Grupo de Pacifico. 

Their management has been a continuing source of controversy, however,
especially in Tijuana, where concessionaires have resisted repeated attempts
to oust them. Furthermore, Ejido Tampico, the communal organization that
owned the land on which the airport was developed, has pushed for payment of
land that was seized in the 1970s to create the airport. 

Concessionaires in Tijuana and other airports, such as those in Guadalajara
and Leon, have accused the private investors of fiscal and operational
mismanagement. 

GAP also pledged to invest money to construct a terminal on Otay Mesa, where
U.S. passengers could check in and then cross the border to the airport on a
secured walkway. The project never materialized. Neither has a project to
turn the former Matrix aircraft repair facility into an air cargo operation.


The cross-border terminal could have made the Mexican government's IPO more
attractive to international investors, said Ralph Nieders, a San Diego
consultant hired by the Spanish investors to promote the project. 

"The Tijuana airport still needs to be part of a larger scheme," he said
yesterday. "GAP itself is not interesting to international investors without
a U.S. element. That's what would make the package attractive." 

Tijuana International Airport and the cross-border terminal have been
dropped as an alternative to San Diego's Lindbergh Field by the San Diego
Regional Airport Authority.


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