Panama Jack
25th Jul 2005, 23:15
Slim, Azcarraga to Invest in Mexican Startup Airline (Update1)
July 25 (Bloomberg) -- Mexican billionaires Carlos Slim and Emilio Azcarraga plan to take a combined 50 percent stake in a new low-cost airline that will compete with the nation's two largest carriers.
Slim's bank, Grupo Financiero Inbursa SA, and Azcarraga's Grupo Televisa SA, the world's largest Spanish-language broadcaster, each will own 25 percent of Vuela Compania de Aviacion SA, the companies said in statements to the Mexico City stock exchange.
The investments mark the start of increased competition in Mexico's aviation industry as the government prepares to sell control of state-owned airlines Mexicana and Aeromexico to private investors this year. Vuela also will face competition from a new Brazilian carrier, Gol Linhas Aereas Inteligentes SA, which has plans to start its own low-cost airline in Mexico.
``Mexico presents an attractive opportunity for Vuela because of its size and for its large growth potential,'' Televisa said in a statement.
Private Funds
Vuela, which was founded by private equity funds led by Pedro Aspe, a former finance minister and current Televisa board member, obtained a concession in May to operate low-fare flights from the international airport of Toluca, about 43 miles from the center of Mexico City. It will start operations next year.
El Salvador's Taca International Airlines is also a partner in Vuela. Vuela didn't disclose the sizes of the stakes held by Taca and Aspe.
Slim, 65, amassed a $23.8 billion fortune from telecommunications and banking to become the world's fourth- richest person and Mexico's No. 1, according to the Forbes magazine's list of billionaires. Azcarraga, 37, is Mexico's 10th- richest man with a $1 billion net worth, according to Forbes.
Televisa's shares rose 23 centavos, or 0.6 percent, to 36.10 pesos on the Mexican stock exchange at 10:54 a.m. New York time. Inbursa gained 2 centavos, or 0.1 percent, to 24.80 pesos.
The Mexican government plans to exit the airline business this year after the recession in 1995, the worst in six decades, forced it to rescue Aeromexico and Mexicana. They will be sold separately to meet antitrust regulations.
The government will announce on Aug. 9 the name of investors that are qualified to bid. Credit Suisse Group is advising the government on the sale.
To contact the reporter on this story:
Adriana Arai at [email protected]
Last Updated: July 25, 2005 11:17 EDT
Bloomberg.com Article (http://www.bloomberg.com/apps/news?pid=10000086&sid=au8gOKXWcQ3c)
July 25 (Bloomberg) -- Mexican billionaires Carlos Slim and Emilio Azcarraga plan to take a combined 50 percent stake in a new low-cost airline that will compete with the nation's two largest carriers.
Slim's bank, Grupo Financiero Inbursa SA, and Azcarraga's Grupo Televisa SA, the world's largest Spanish-language broadcaster, each will own 25 percent of Vuela Compania de Aviacion SA, the companies said in statements to the Mexico City stock exchange.
The investments mark the start of increased competition in Mexico's aviation industry as the government prepares to sell control of state-owned airlines Mexicana and Aeromexico to private investors this year. Vuela also will face competition from a new Brazilian carrier, Gol Linhas Aereas Inteligentes SA, which has plans to start its own low-cost airline in Mexico.
``Mexico presents an attractive opportunity for Vuela because of its size and for its large growth potential,'' Televisa said in a statement.
Private Funds
Vuela, which was founded by private equity funds led by Pedro Aspe, a former finance minister and current Televisa board member, obtained a concession in May to operate low-fare flights from the international airport of Toluca, about 43 miles from the center of Mexico City. It will start operations next year.
El Salvador's Taca International Airlines is also a partner in Vuela. Vuela didn't disclose the sizes of the stakes held by Taca and Aspe.
Slim, 65, amassed a $23.8 billion fortune from telecommunications and banking to become the world's fourth- richest person and Mexico's No. 1, according to the Forbes magazine's list of billionaires. Azcarraga, 37, is Mexico's 10th- richest man with a $1 billion net worth, according to Forbes.
Televisa's shares rose 23 centavos, or 0.6 percent, to 36.10 pesos on the Mexican stock exchange at 10:54 a.m. New York time. Inbursa gained 2 centavos, or 0.1 percent, to 24.80 pesos.
The Mexican government plans to exit the airline business this year after the recession in 1995, the worst in six decades, forced it to rescue Aeromexico and Mexicana. They will be sold separately to meet antitrust regulations.
The government will announce on Aug. 9 the name of investors that are qualified to bid. Credit Suisse Group is advising the government on the sale.
To contact the reporter on this story:
Adriana Arai at [email protected]
Last Updated: July 25, 2005 11:17 EDT
Bloomberg.com Article (http://www.bloomberg.com/apps/news?pid=10000086&sid=au8gOKXWcQ3c)