MEXICO CITY (Reuters) - Debt-laden Mexican builder ICA is in final talks to bid with Ferrovial and two other partners to build a new $3.5 billion (2.66 billion pounds) Mexico City airport terminal, four sources said, after the Spanish construction company mulled scrapping the joint bid plans.
The two companies are in talks with Dragados, a unit of Spain’s Grupo ACS, and GP Construccion, a Monterrey-based company. It was not clear what stakes each company would have in the consortium to build the terminal.
Ferrovial and Empresas ICA SAB de CV declined to comment, while GP Construccion and Dragados did not respond to requests for comment.
The futuristic airport building was designed by British architect Norman Foster and billionaire Carlos Slim’s son-in-law Fernando Romero. It would anchor a new Mexico City airport costing about $13 billion that is slated to begin operations in 2020.
The terminal, which two sources said would cost around $3.5 billion, is President Enrique Pena Nieto’s signature infrastructure project and is aimed at turning Mexico City into a regional hub.
Reuters reported in May that Ferrovial was weighing cancelling plans to bid jointly with ICA, which is struggling to restructure. The companies signed a memorandum of understanding about the project last year, however.
One of the sources said Ferrovial asked ICA to show it a viable restructure plan, adding that ICA complied and that Ferrovial was satisfied with the plan.
All of the sources who spoke about the airport terminal deal did so on condition of anonymity, saying they had not been authorized to speak about the matter publicly.
Ferrovial, which won a 2010 contract to build a terminal at London’s Heathrow Airport for around 800 million pounds, would ordinarily be well-placed to win the contest for the Mexican project. But many question whether the government would consider awarding the contract to a consortium that includes ICA, which has struggled under millions in dollar-denominated debt and a dwindling stream of projects.
ICA got a lifeline in the form of a $215 million credit from enigmatic financier David Martinez’s investment firm Fintech in June, allowing it to finance new contracts while negotiating with creditors to restructure debt.
Martinez, a distressed debt investor from Monterrey, is known for reaping big profits from bets on distressed companies like Mexican glassmaker Vitro, which emerged from a lengthy debt restructuring process in 2013.
According to the July call for bids for the terminal construction, proposals are due in November and a winner will be announced in December. Work will begin in January 2017.
ICA launched bids for the first two runway projects with Portuguese construction firm Mota Engil earlier this month.
Reporting by Alexandra Alper; Editing by Chizu Nomiyama and Tom Brown