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Goldman in talks to sell Mexican tollroad operator

Spain's Abertis, Singapore's GIC are the frontrunners for roughly 70% of RCO

New York

GOLDMAN Sachs Group Inc is in advanced talks to sell a majority stake in one of Mexico's largest private tollroad operators to Abertis Infraestructuras SA and GIC Pte Ltd, according to people familiar with the matter.

The potential deal for roughly 70 per cent of Red de Carreteras de Occidente is likely to value RCO at about 65 billion pesos (S$4.6 billion), said the people, who asked to not be identified because the matter isn't public.

Goldman owns the stake through funds managed by its infrastructure-investing arm.

Abertis, a tollroad manager based in Spain, and GIC, the Singapore sovereign wealth fund, have emerged as frontrunners in a competitive sales process for the asset, the people said.

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A consortium that includes the alternative asset manager Blackstone Group Inc and airport operator Grupo Aeroportuario del Pacífico SAB de CV made an offer conditioned on regulatory approvals on tariff rates, the people said. China Merchants Bank Co also bid, one of the people said.

No final decision has been made and Goldman could opt to keep the asset or sell it to other suitors, the people said.

Representatives for Goldman, Blackstone and GAP Airports declined to comment.

Representatives for RCO and Abertis didn't immediately respond to requests for comments.

Representatives for GIC and China Merchants couldn't be reached for comment outside of business hours.

RCO, which oversees 11 highways spanning 877 kilometres, made a cash distribution to shareholders last month of seven billion pesos, according to its website.

Its roads connect Mexico's industrial corridor known as El Bajio with Mexico City and Guadalajara.

Goldman, which first invested in the company in 2007, acquired an additional 18.7 per cent in the toll road network in 2013 from Empresas ICA for 5.07 billion pesos.

Total traffic grew at a compounded annual rate of 8.1 per cent between 2013 and 2018, according to a May 2019 report on the tollroad operator's website.

It had unadjusted earnings of 7.97 billion pesos in 2019, according to its annual report. BLOOMBERG


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