Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Exclusive: Embattled Mexican builder ICA CEO Quintana leaving post - sources

Published 02/22/2016, 10:54 PM
© Reuters. Quintana, CEO of construction company ICA, gestures during an interview with Reuters in Mexico City
TV
-
ICAYY
-
MXX
-

By Alexandra Alper and Roberto Aguilar

MEXICO CITY (Reuters) - Alonso Quintana Kawage, chief executive of Mexico's cash-strapped construction company ICA (MX:ICA), is leaving his post, two sources familiar with the matter said, as the company struggles to renegotiate its multi-billion dollar debt load.

The move is part of a wider restructuring aimed at regaining investor confidence after the company's steep slump into debt and a cash crunch under Quintana, the grandson of ICA's founder and who became CEO in 2012.

Both sources said that veteran company executive Luis Zarate would now be appointed CEO, while one of the sources said that current Co-Chief Executive Alfonso Gonzalez Migoya would remain in his post.

According to one person familiar with the matter, Quintana would still sit on ICA's board and could be given a new position at the company.

A spokesman for the company declined to comment.

The firm, which has defaulted on about $60 million in interest payments since December, saw its net debt reach 51.147 billion pesos ($2.97 billion) in the third quarter as a slump in the peso caused its dollar debt value to balloon.

ICA's shares are down 68 percent over the past year, making it the worst performing stock on the IPC index.

ICA's corporate reshuffle has been unrolled at a dizzying pace, as the firm, which built iconic structures like the towering headquarters of state oil giant Pemex, has sought to convince skeptical investors it is charting a new course.

Orlando Loera, who led the restructuring of Mexican homebuilder Geo over the last three years, was named chief restructuring officer in December. But he was quickly replaced by Guadalupe Phillips, a former Grupo Televisa (MX:TLVACPO) vice president, in January.

Gonzalez Migoya, non-executive chairman of low-cost airline Volaris, was brought on as co-CEO in December to help carry out the company's operational and financial restructuring while Quintana continued to run operations.

Still, calls for Quintana's ouster began months before the current management shift, one source said.

According to two people familiar with the matter, the latest bout of pressure came from the board, which is presided over by Quintana's father, Bernando Quintana Isaac, and includes other family members. Quintana Isaac served as CEO from 1994 to 2006.

Aided by Rothschild and FTI Consulting, ICA, which has also been hit by a slump in government infrastructure spending, vowed to draw up a restructuring plan by mid-February.

But even as the company has made offers to banks to restructure debt, according to two sources and a document seen by Reuters, the lack of liquidity has hampered ICA's efforts.

© Reuters. Quintana, CEO of construction company ICA, gestures during an interview with Reuters in Mexico City

One person familiar with the matter expects a plan to be presented in March. The company is slated to report fourth quarter earnings next week.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.