Mexican State Pension Fund Spent Millions on Failing Builder

Published in

Mexico's state workers' pension fund plowed more than $20 million into ICA and became the largest shareholder as the builder spiraled toward insolvency, according to people familiar with the matter, with the fund's investment set to be wiped out in a restructuring, the International New York Times reported on a Reuters story. PensionIssste, which manages about 195 billion pesos ($10.5 billion) of mostly government workers' retirement money, became the largest shareholder in ICA, with a stake of almost 10 percent, said three people with knowledge of the investment who spoke on condition of anonymity. Many details of the transaction are not publicly available and none of the parties involved were willing to comment. Half-way through 2015, ICA shares had sunk more than 50 percent from the year earlier as a crash in the peso had increased its heavy dollar-denominated debt load and lower government infrastructure spending led to a cash crunch. Despite that PensionIssste began to buy up ICA shares and spent around 400 million pesos ($21.5 million) at an average price of around 7 pesos per share, one source said. Read more. (Subscription required.)