The acquisition of 13 Iberdrola plants with a capacity of 8,539 megawatts by the Government of Mexico would be carried out through a Development Capital Certificate (ckd) for 2,400 million dollars of which the National Infrastructure Fund (Fonadin) will contribute 51% and the Afores the rest, while at the end of this month or the beginning of June it is expected that the loan will be obtained for 3.5 billion dollars to finance the rest of the purchase, an operation in which there are already at least seven interested agents.
And it is that the global director of corporate development of Mergers and Acquisitions of Iberdrola (M&A, for its acronym in English) David Mesonero, met at the National Palace with Gabriel Yorio, undersecretary of the Ministry of Finance and Public Credit and president of Fonadin, with the aim of delving into the details of the acquisition of the Iberdrola plants by the Mexican government.
According to sources consulted by the newspaper The Economist, from SpainMexico’s plans go through the constitution, by Fonadin, of a Development Capital Certificate which will have 2,400 million dollars. Of this amount, the fund will contribute 1,224 million –although it will control 51% of the capital– and the Afores (Retirement Fund Administrators) will allocate 1,176 million.
These ckd are usually issued by trusts and in this way, investment resources are channeled to sectors with long-term growth potential. The projects, in this case, are in a state of operation and can be amortized in up to 50 years.
The Development Capital Certificates They are not backed by a liability, but rather represent a portion of the equity in those assets of the company they finance. This is the reason why they are not subject to a credit rating, the sources of the Spanish newspaper explained.
At the same time, the Fonadin will contract for the financial administration of the transaction and the assets to the fund Mexico Infrastructure Partners (MIP). This vehicle will need financing, which in turn will be supported by the flows generated by the plants, as well as that provided by banks.
Progress has also been made with a group of banks to finance the remaining 3.5 billion dollars, an operation that could take place at the end of May and beginning of June, they revealed.
Mexico Infrastructure Partners Thus, it will be in charge of the operation of the vehicle (contracts and payments) on behalf of the investors. As has already been said, it is a Mexican company that manages investments for close to 4,000 million dollars and is the largest in Latin America, in addition to having extensive experience working with Fonadin.
As detailed by Judith Santiago, of The EconomistMIP is an active issuer of capital in the Mexican stock exchange (BMV) since 2014. Since then and until 2020, it has made four issuances of ckd. Besides, he has made two offers from Cerpis and –in March of this year– two E-fibers, which are instruments for investments in energy and infrastructure. MIP works through specific investment projects – through which highway, aeronautical, hydraulic, energy and social infrastructure projects (prisons) are financed.
The financing agreement has already attracted interest from Nafin-Bancomext, Banobras, Sumitomo Mitsui and BNP Paribas. As well as BBVA and Banco Santander. In Mexico, there has been speculation about the possible participation of the Abu Dhabi sovereign wealth fund, ADIA, although sources consulted by the Iberian newspaper ruled it out.
Also, according to Energy Commission of the Advisory Council of Businessmen of Mexicothe American electric company AES would have also been interested in contributing two power plants to this vehicle ckd who is setting up the government. Specifically, it would be the Mérida III and Tamuín plants, in San Luis Potosí.
The Secretariat of Finance and Public Credit was consulted regarding this latest update of the operation and did not issue a response confirming it.
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