Mexico City — ICA, the Mexican construction company that was once considered the largest in the country, announced Friday that it will prepare the documents to delist from the Mexican Stock Exchange (BMV) and the National Securities Registry, according to a report sent to the BMV, after six years without any share movements.
The company said in a statement that, by agreement of the board of directors, Ascensión Medina has been appointed as transition director, so that, together with Próspero Antonio Ortega and Bernardo Casas Godoy, CEO and CFO respectively, he will attend to the transition process and derivative acts related to the cancellation of the registration of the issuer’s securities.
The delisting process takes place after eight five years of not trading on the Mexican Stock Exchange following the series of financial problems that afflicted ICA and that concluded with its entry into insolvency proceedings, which ended in March 2018.
The Mexican construction company’s shares ceased trading on the local stock market in August 2017 due to the lack of delivery of financial information. Since then, the shares have not been reactivated due to the missing quarterly report documents.
“Yes, they have published information, but it is incomplete and not with the formats requested under the rules,” said Jacobo Rodriguez, financial specialist at Roga Capital.
ICA had been trying to return to the stock market, but under another process such as a new listing, according to the investment director at Invala Family Office, Amín Vera, something similar to what occurred with Aeroméxico and real estate developer Casas Geo. For that process, ICA had to initiate a dissolution process and a new process initiated in order to be able to register the new shares on the market.
ICA’s announcement comes prior to the start of the Stock Market Reform Law, which seeks to eliminate ‘zombie’ companies, whose shares no longer operate due to lack of process or updates in the local stock market.
What happened to ICA?
ICA was one of the major companies that developed several well-known projects in the country, such as the construction of lines 1, 3, 7, 9 and 12 of the Mexico City Metro.
It was also the creator of MUCA, the University Museum of Contemporary Art; the Torre Mayor office tower, the Basilica of Guadalupe, the Central Library of Pachuca, the Olympic Stadium Mexico 1968, the Sports Palace stadium, and the Children’s Hospital of Pachuca.
ICA was founded in 1947 by Bernardo Quintana with a capital of 100,000 pesos and 18 engineers. Months later, it won the bid for the construction of the Miguel Alemán residential complex in the capital.
Its share price reflected the success of the business, even reaching 133.88 pesos per unit in 1997, according to Bloomberg data.
Years later, in 2016, ICA announced the launch of its American Depositary Shares (ADR) on the New York Stock Exchange and led the list of companies in the sector; however, only a year later its revenues plummeted more than 50%.
On August 28, 2017, the Mexican Stock Exchange issued a statement informing of the suspension of the company’s shares after it missed the deadline for the presentation of its second quarterly report of that year.
Days before the suspension, ICA, together with its subsidiaries ICA Tenedora, Constructoras ICA, Controladora de Operaciones de Infraestructura and Controladora de Empresas de Vivienda, announced that it had filed for insolvency proceedings due to its 64.16-billion-peso debt and the financial problems it was facing.
“This amount includes secured, common and subordinated loans, as well as bonds issued in dollars,” said Ve por Más analysts in a note.
Although the shares were already trading close to 1.50 pesos per unit, they registered a plunge of 61.2% from the end of August 2016 until they were suspended from the Mexican Stock Exchange, according to Bloomberg data.
Despite the process, ICA had won the bid to build part of the new Mexico City international airport project, a Norman Foster-designed complex that, shortly after construction work had begun, was cancelled by President Andrés Manuel López Obrador.
ICA was in charge of the terminal platform construction project, satellite building, cargo terminal and terminal maintenance, according to project documents.
The company that was once considered the largest construction company in the country presented its financial restructuring plan, which it estimated would be completed in 2021. In that document, ICA estimated that almost 60% of the capital structure would be in the hands of unsecured creditors; it also announced the intervention of David Martínez Guzman through a $215 million loan with Fintech Europe.