Corporate Finance : Mexican Airport Operator Raises $1 Billion In IPO


Grupo Aeroportuario del Pacifico, or GAP, Mexicos largest airport operator, raised $1 billion in the countrys largest privatization since the sale of Telmex in 1990.

The government sold its 85% stake in GAP, which operates 12 airports in Mexico, including those in Tijuana, Guadalajara and Puerto Vallarta. GAP listed its American depositary receipts on the New York Stock Exchange, becoming the 17th company from Mexico to list on the exchange. The ADRs rose 34% in their first day of trading on February 24. Each ADR is equivalent to 10 Series B shares.

The Bank of New York was named as depositary for the ADRs, which comprised the first NYSE-listed depositary receipt offering for a Mexican company in 2006. The exchange said the transaction was the largest IPO from Latin America on the NYSE since Brazils Petrobras in August 2000. Several additional new listings and IPOs from the Latin American region are expected in the first half of 2006.

Strategic partner Aeropuertos Mexicanos Pacificos, or AMP, whose owners include Spanish airport operator Aena, owns a 15% stake in GAP. Credit Suisse was the sole global coordinator for Guadalajara-based GAPs international offering. The companys shares also trade on the Mexican Stock Exchange.

Meanwhile, Chinas largest paper manufacturer, Nine Dragons Paper (Holdings), rose 40% in its debut on the Hong Kong Stock Exchange on March 3. The company raised $500 million in its IPO, which attracted orders for 578 times the shares initially offered to Hong Kong retail investors.

The offering smoothed the path for upcoming share offerings by Chinas leading banks this year, including an $8 billion listing planned by Bank of China that is expected by the end of June in a sale being led by Goldman Sachs.

Industrial & Commercial Bank of China selected Credit Suisse, Deutsche Bank and Merrill Lynch last month to handle its IPO, which is expected to raise between $10 billion and $15 billion in the second half of this year. Goldman Sachs was excluded from the sale even though it bought a 7% stake in the bank earlier this year for $2.58 billion.

Meanwhile, German Gref, Russias economic development and trade minister, says Rosneft, the countrys third-largest oil producer, plans to issue between $15 billion and $17 billion in an IPO later this year. Rosneft, which purchased the assets of Yukos last year, plans to list on the London Stock Exchange.

ADR Platform Adds UK Shares

I.A. Englander, a New York-based derivatives broker, has added American depositary receipts of more than 50 British companies to its electronic platform, ADR Navigator, which enables institutional investors to convert ADRs to ordinary shares and vice versa.

ADR Navigator, which went live in July 2004, is the first independent platform for converting ADRs to shares, says John Gelbard, senior vice president of I.A. Englander and manager of the marketplace.

The platform is not affiliated with any ADR depositary bank, Gelbard says. We act as a broker, finding investors with opposite positions in ADRs and shares and arranging for them to swap positions.

Transaction costs for using the system are significantly lower than depositary bank conversion charges, he says.

Designed to provide liquidity to the ADR-arbitrage market, ADR Navigator was created in response to demand from European clients, Gelbard says. UK-based companies were only added in February 2006, however, because of issues related to the 0.5% UK stamp duty. Institutions typically trade CFDs, or contracts for difference, as proxies for local British shares to avoid having to pay the stamp duty.

Gordon Platt