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ICA Says Talks Under Way With Inbursa

October 25, 2003

MEXICO CITY (AP) _ Mexico’s largest construction company revealed Friday that influential billionaire Carlos Slim is looking to take a majority stake in the company.

Slim, the richest man in Latin America, has committed to invest $450 million through his companies and charities to renovate Mexico City’s historic center, and has recently spoken of the need for more housing and infrastructure projects in Mexico.

Construction and engineering firm Empresas ICA Sociedad Controladora, or ICA, reported to the Mexican Stock Exchange on Friday that it has held preliminary discussions with shareholders of Grupo Financiero Inbursa about alternatives to restructure its finances, including issuing the group new shares at a preferential price. Slim is Inbursa’s chairman.

In a separate filing Friday, a group of investors including Slim told the U.S. Securities and Exchange Commission that they have a 12.4 percent stake in ICA and have held preliminary discussions to take a majority stake.

Inbursa bailed ICA out of a financial bind in December by lending the construction group $1.18 billion. Now Inbursa could be coming to ICA’s aid again, as the company has a $90 million convertible bond coming due in March and lacks sufficient funds to make the payment.

ICA stressed that the two parties have yet to reach a formal agreement or understanding regarding a capital increase or any other transaction.

ICA, founded in 1947, has operations in 21 countries, working on civil and industrial projects. It also seeks housing, airport and highway projects through its various subsidiaries.

Trading of ICA shares was briefly suspended Friday on the Mexican Stock Exchange as regulators ordered the company to disclose information about the debt negotiations.

Nevertheless, ICA shares posted sharp gains and accounted for an incredible 29 percent of the day’s activity on the exchange, with 29.3 million shares swapping hands. It was the biggest volume the company’s shares have seen in at least 10 years.

``The market has the impression that this (capital increase) is going to happen, as you can see in the shares,″ said Carlos Perezalonso, an analyst with BBVA Securities.

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On The Net: http://www.ica.com.mx/ica_eng/Indexeng.asp

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