"Latest Mexican Airport IPO Takes Off"

Wednesday, November 29, 2006

Latest Mexican Airport IPO Takes Off 
By LYNN COWAN
The Associated Press 


WASHINGTON - A Mexican airport operator had a powerful takeoff on its first
day of trading Wednesday.

Grupo Aeroportuario Del Central Norte, which operates 13 airports in Mexico,
saw its shares jump $3.64, or 20 percent, to $21.64 in late-morning trading
on the Nasdaq Stock Market. It had slipped, however, from its opening price
of $22.

The company sold 20.9 million American Depository Shares at an initial
public offering price of $18 a share. That was above the expected per-share
price range of $14.50 to $16.50 set by underwriter Citigroup Inc.

The company is also listing simultaneously on the Mexican Stock Exchange
under the symbol OMA.

Grupo Aeroportuario Del Central Norte, whose name translates in English to
Central North Airport Group, is the first of two deals expected this week in
a light initial public offering market following the U.S. Thanksgiving
holiday. Also expected this week is Netlist Inc., which makes semiconductor
memory chips.

The company's debut follows the successful offering in February of Grupo
Aeroportuario del Pacifico SA, which gained 35 percent on its first day of
trading. That stock is currently up about 88 percent from its IPO price of
$21. In 2000, Grupo Aeroportuario del Sureste SA went public with modest
gains, and has nearly tripled from its $15.13 IPO price.

Like its predecessors, which operate airports in the Pacific, central and
southeast regions of Mexico, Grupo Aeroportuario Del Central Norte was
created as part of a government privatization plan in the late 1990s.

The Mexican government sold a 41 percent stake through Wednesday's public
offering, with the $376 million in proceeds flowing into its coffers.
Previously, about 50 percent of the company's total stock was sold to
investors that include a subsidiary of Mexican construction company Empresas
ICA SA and French company Airoports de Paris Management SA, which runs
Charles de Gaulle and Orly airports in France.

The company holds concessions to run airports in Monterrey, Acapulco and 11
other locations, which allows it to collect fees from airlines and
passengers and to earn rental and other income from leased space to
restaurants and retailers. According to figures published by the Mexican
Bureau of Civil Aviation, it accounted for about 15 percent of all arriving
and departing passengers in Mexico in 2005.

Besides the good returns that investors have seen from past Mexican airport
IPOs, other factors have helped drive interest in Grupo Aeroportuario Del
Central Norte, said Scott Sweet, founder and managing director of
ipoboutique.com, a Tampa IPO research service. European travel to resorts
served by the company's airports has piqued interest among continental
investors who are seeking emerging market investments; the company's main
airport is also located in the third-largest city in Mexico.

"The thing that strikes me on this airport operator coming public is that
its hub is Monterrey, the institutional and educational center of Mexico.
It's attracting not only an increased amount of business travel, but also
other travel opportunities," Sweet said.

In the first six months of 2006, the company's total revenue rose 12 percent
to $68.5 million as passenger and airplane traffic rose, and its net income
rose 24 percent to $24.2 million, on a U.S. GAAP basis.

Like other travel-related businesses, Grupo Aeroportuario Del Central
Norte's profits depend on passenger and cargo volumes. The company warns
that its financial performance could be hurt by issues beyond its control,
ranging from economic slowdowns to terrorism and natural disasters.

 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dcfp/dcboard.php


*****************************************