Canceled airport trust could agree on early payment plan

An investment trust created to help fund the now-canceled Mexico City airport project said it will call for a shareholders meeting to approve a government plan to buy back shares

Canceled airport trust could agree on early payment plan
The Texcoco airport - Photo: File Photo/EL UNIVERSAL
English 03/01/2019 14:45 Reuters Mexico City Anthony Esposito, Veronica Gomez and Stefanie Eschenbacher Actualizada 14:45

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An investment trust created to help fund the now-canceled Mexico City airport project said it will call for a shareholders meeting to approve a government plan to buy back shares ahead of schedule.

In a statement, the trust said that the government-run Mexico City Airport Group (GACM) had resolved to make the early repayment of the preferred shares that back trust certificates issued in 2018.

The statement said the GACM’s plan would be put to a shareholder vote in a meeting to be called in early January.

That could represent a first step in allowing investors of the ditched project to get at least some of their money back.

However, it is not clear how the plan could affect the MXN $30 billion worth of trust certificates, also known as FNAIM, that were issued last March, mostly to Mexican investors.

The Mexican government has until January 4 to formally announce the cancellation of the Texcoco airport.

President Andrés Manuel López Obrador is scrapping the partially-built $13 billion airport. López Obrador, who took office on December 1, has long argued the project was tainted by corruption and too expensive. He said last month that construction to convert a military airstrip into a commercial airport will begin in January.

He was able to move forward with the cancellation after bondholders agreed to sell back $1.8 billion of $6 billion worth of debt issued for the project.

The trust certificates are a type of Mexican investment vehicle known as “Fibra E” that was designed to allow local pension funds to boost infrastructure and energy investments.

López Obrador’s move to ditch the country’s largest infrastructure project touched off a major sell-off in Mexican assets.

The airport Fibra was issued as López Obrador was already threatening to cancel the airport if he won the presidential election, and its placement has made canceling the project more complex by involving more private investors.

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