Mexico's Homex Sells Penitentiaries to Slim Firms Amy Guthrie - Dow Jones Newswires
go to original April 21, 2013

Under the agreement, Carlos Slim's bank and his infrastructure firm  would take control of the prisons. (AP)

Financially troubled Mexican homebuilder Desarrolladora Homex SAB said Friday it has struck a deal to sell its stake in federal penitentiaries in the states of Morelos and Chiapas to companies controlled by Mexican billionaire Carlos Slim for four billion pesos ($327 million).

Under the agreement, Slim's bank, Grupo Financiero Inbursa SAB, and his infrastructure firm Impulsora del Desarrollo y el Empleo en America Latina SAB would take control of the prisons, Homex said in a statement to the Mexican Stock Exchange.

Homex expects to continue its work building the prison in Morelos, and to participate in operating the prisons. It didn't say when it expects the deal to close.

The company plans to use MXN2 billion of the proceeds for working capital, and the rest to prepay debt. Among the company's financial obligations is $250 million in senior notes due 2015. Analysts have said that a sale of the penitentiary business could improve Homex's liquidity, and thus its credit outlook.

Homex American Depositary Receipts spiked on the news, trading up 22% recently to $7.10 on the New York Stock Exchange.

Read the rest at Fox News

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