Friday, April 27, 2007

Mexican firm IDEAL and Maquarie team up to purchase 'pre owned' toll roads south of the border

Slim's Ideal, Macquarie to Bid for Mexican Toll Roads


By Adriana Arai
Co[pyright 2007

Billionaire Carlos Slim's Impulsora del Desarrollo y el Empleo en America Latina SA and Macquarie Infrastructure Group teamed up to bid for a package of four Mexican toll roads worth at least $2.3 billion.

The four highways cover 558 kilometers (336 miles), Slim's Mexico City-based Ideal said in its quarterly earnings statement. Sydney-based Macquarie Infrastructure has interests in 11 toll roads in Australia, Europe and North America.

Slim, the world's second-richest man, would add the toll roads in central Mexico to five already run by Ideal in the nation as he increases bets on highways. Macquarie, with the U.K.'s M6 and the Indiana Toll Road in its portfolio, is focusing on expansion outside Australia after spinning off highways in Sydney last year.

"These roads are very attractive because they're ready and have a track record,'' said Edgar Amador, strategy director for Dexia SA's unit in Mexico, which is also interested in participating in the bidding. "It's like privatizing a profitable company.''

Mexico's government is seeking to resell $25 billion of highways after taking them over from private companies that had no money to maintain the projects following a currency crisis in December 1994. Toll roads are luring investors such as Macquarie and Ideal for their predictable cash flows and growth potential.

The Mexican federal government plans to divest the highways over the next six years. The first package is worth at least 25 billion pesos ($2.3 billion), according to the International Finance Corporation.

Roads and Dams

Ideal has a 60 percent stake in the partnership with Macquarie, said Ideal project director Adrian Pandal on a conference call with analysts today.

"There's a lot of competition but we think we're in a good position'' to win the toll road contracts, Pandal said.

Slim created Ideal in 2005 to make money from roads, dams and construction after amassing a fortune of more than $50 billion from telecommunications and banking. His fortune makes him the world's second-richest man behind Microsoft Corp's Bill Gates, according to the Forbes list of billionaires.

Macquarie Infrastructure reported a 76 percent jump in profit for the first half ended Dec. 31 to A$1.4 billion, boosted by revenue from its U.S. road assets.

Ideal yesterday reported a 71 percent decline in first- quarter profit to 129.7 million pesos. Revenue rose 19 percent to 592.7 million pesos as toll income surged 30 percent.

To contact the reporter on this story: Adriana Arai in Mexico City at
Last Updated: April 27, 2007 10:28 EDT

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