© Reuters. FILE PHOTO: The emblem of mining and infrastructure agency Grupo Mexico is pictured at its headquarters in Mexico Metropolis, Mexico, August 8, 2017. REUTERS/Ginnette Riquelme
By Valentine Hilaire and Noe Torres
MEXICO CITY (Reuters) – The Mexican Navy on Friday took over a bit of railway in southern Mexico operated by a unit of Grupo Mexico , and shares within the mining and infrastructure firm fell by greater than 4% after the expropriation.
Calling the transfer “shocking”, the transport unit Grupo Mexico Transportes mentioned the Navy had occupied its services on the Coatzacoalcos-Medias Aguas part at 6 a.m.(1200 GMT), and that it was weighing up its choices.
Earlier, Mexican President Andres Manuel Lopez Obrador’s authorities issued a decree ordering a “short-term” takeover of round 120 kilometers (75 miles) of the agency’s community within the space as a consequence of its significance to a serious infrastructure mission.
Often called the Inter-Oceanic Hall, the mission facilities on modernizing the rail hyperlink between Mexico’s Pacific and Gulf coasts on the Isthmus of Tehuantepec to create a commerce route the federal government hopes will compete with the Panama Canal.
Grupo Mexico Transportes will maintain offering companies underneath supervision of the armed forces, it mentioned.
The part “expropriated” is about 1.1% of the 11,137 km run by Grupo Mexico’s transport division, analysts at brokerage Vector mentioned in a consumer be aware. The unit generated 20.3% of the guardian firm’s revenues within the final 12 months, they mentioned.
Grupo Mexico, owned by tycoon German Larrea, has been closing in on the acquisition of U.S. Citigroup Inc (NYSE:)’s retail banking operations in Mexico.
The federal government decree declared the part was of “public utility”, citing an expropriation legislation stating such measures may solely be taken in change for compensation to the affected get together.
A day earlier, Mexico’s Supreme Court docket struck down a authorities order declaring key infrastructure tasks issues of nationwide safety. The court docket mentioned the measure violated freedom of entry to info rights. Hours later, the federal government hit again with a brand new decree declaring numerous flagship tasks together with the Inter-Oceanic Hall areas of nationwide safety.
The federal government has allotted a swathe of public works to the armed forces, together with a contract for a key part of the “Mayan Prepare”, one other of the president’s tasks geared toward growing Mexico’s poorer south.
Shares in Grupo Mexico had been down by greater than 4% on Friday afternoon, a drop mirrored by Grupo Mexico Transportes’ inventory.
