September 6, 2017 / 7:29 PM / 10 months ago

Grupo Mexico eyes October IPO of its rail unit: sources

MEXICO CITY (Reuters) - Mexican mining conglomerate Grupo Mexico (GMEXICOB.MX) has resumed plans to list its transportation division, including its Ferromex railroad operator, on Mexico’s stock exchange, four sources with knowledge of the matter told Reuters.

The logo of mining and infrastructure firm Grupo Mexico is pictured at its headquarters in Mexico City, Mexico, August 8, 2017. REUTERS/Ginnette Riquelme

Its GMexico Transportes transportation division, previously called Infraestructura y Transportes Mexico (ITM), includes subsidiaries Ferrocarril Mexicano (Ferromex), Ferrosur, Intermodal Mexico and Texas Pacifico.

The initial public offering will be launched in October, according to two of the sources, who asked to remain anonymous because they were not authorized to publicly speak about the matter.

Grupo Mexico in 2016 scrapped plans for the IPO of 15 percent of ITM’S stock, arguing that market conditions were not optimal. It planned to raise between 13.7 billion and 16.0 billion pesos ($770 million to $899 million).

Calls and emails to the company went unanswered.

Grupo Mexico struck a $2.1 billion deal in March to take over Florida East Coast Railway, allowing it to expand its exposure to U.S. rail freight, increase dollar earnings and diversify revenue sources.

($1 = 17.8005 Mexican pesos)

Reporting by Sheky Espejo; Writing by Anthony Esposito; Editing by Lisa Shumaker

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