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Mexican builder, ICA, considers expansion

Mexican infrastructure giant, ICA, is considering expanding its interests in the home construction industry, according to two sources.

The sources, who were not authorized to speak on record, said that due to last year’s collapse of Urbi, Geo and Homex, the construction firm is considering taking advantage of the financial woes of their competitors. All three companies fell last year after slumping sales and heavy debt loads of their inexpensive, single-unit homes in areas that were often far from city centers.

Although the companies are attempting to restructure their debit, their troubles have opened the playing field to others such as ICA and Mexican house builder, Javer, who said last month they were planning to raise between 3 and 3.5 billion peso to make an initial public offering.

On Monday, ICA, who have struggled with their own financial woes in the past, said that they have teamed up with Caisse de depot et placement du Quebec, Canada’s second largest pension fund, which will allow them to run transport projects in Mexico.

ICA says that Caisse will put up the 3 billion peso ($196 million CAD) for a 49 percent stake in the project, which will begin with four of their highway projects. News of the projects saw ICA’s stocks spike by more than 7 percent in morning trading.

The ICA source also says the company is considering additional financing to expand their ViveICA homebuilder after the government announced new fiscal stimulas last month to revive the homebuilding sector in Mexico.

One of the company sources said that financing options could include issuing debt, finding a partner, offering stock or seeking capital.

In 2013, Javer and ICA announced a terminated agreement where they had planned to sell assets to Javer in exchange for a 23 percent hold in ICA.

Over the last four years, ViveICA has produced more than 5,000 homes per year, according to one of the sources.

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