Slim loses 28 thousand 684 million pesos in Mexican stock in 8 months | Channel 7 SLP

• Since December, the new government has canceled and changed contracts worth 6 billion dollars and the shares of Grupo Carso have fallen 18 percent on the stock market between January and August.

Mexico.- Since the administration of President Andrés Manuel López Obrador began in August, Grupo Carso – Carlos Slim's company – has canceled a contract for a work at the new airport and has changed three projects for natural gas transportation pipelines, which together represent a value greater than 6 billion dollars.

This caused the value of the company's shares in the Mexican Stock Exchange (BMV) to decrease around 18 percent between January and August 2019, which meant a loss of 28 thousand 684 million pesos.

“The entrepreneur invests not because he has a lot or little confidence, but because he has little or a lot of demand. If there is demand, then it invests, and if not, it is a fool, ”said Carlos Slim Helú, honorary president of Grupo Carso, in his speech at the National Palace when President Andrés Manuel López Obrador announced the restructuring of gas transportation contracts between CFE and Carso Energy.

However, the civil engineer's company faced changes in the business opportunities it had during the administration of Enrique Peña Nieto compared to what it now has with Andrés Manuel López Obrador, highlighting the cancellation of the New Mexico International Airport (NAIM) in Texcoco and the adjustment in gas pipeline agreements granted between 2015 and 2018.

In this regard, Juan Carlos Minero, investment director of Black WallStreet Capital, said that the decisions made in the administration on infrastructure projects inherited from the previous government are those that dragged the actions of Grupo Carso, as well as many of its important contracts.

"The government's plans were the ones that changed the landscape of the company where they had investments," he said.

On January 4, 2019, the Mexico City Airport Group (GACM) announced that it would begin reviewing and canceling NAIM contracts.

Grupo Carso, in consortium with other firms such as FCC, won the contract to construct the terminal building with a value of 3,980 million dollars, which was liquidated early on June 26, after the cancellation of the NAIM.

In addition, on February 11, 2019 López Obrador announced the restructuring of 7 pipeline contracts, because they did not provide the service and represented a cost to CFE.

The Waha-Presidio and Waha-San Elizario pipelines serve CFE to import the United States hydrocarbon. The operation of the two natural gas transportation systems was 806.9 and 565.5 million dollars, respectively.

On the other hand, the Samalayuca-Sasabe section is under construction, where they estimated an investment of 772.4 million dollars (financial cost included).

Even with these changes, Alberto De Los Santos, a leading analyst at Fitch Ratings Mexico, said that Carlos Slim's company remains strong with a diversified strategy for profit, as it also bets on the development of the automotive and telecommunications sector; as well as the growth of its retail chain Grupo Sanborns.

“The diversification of income in segments with more defensive characteristics throughout the cycles, greater profitability and broad access to different sources of financing translate into a solid financial profile, characterized by leverage metrics, interest coverage and robust liquidity,” the specialist detailed.

After the announcement in the National Palace about the new agreements for natural gas transportation, Carlos Slim had a meeting with the Secretary of Energy, Rocío Nahle García, although the subject they touched was not detailed.

Juan Carlos Minero, investment director of Black WallStreet Capital, said that Carlos Slim is likely to have new opportunities with the change in López Obrador's government strategy, given an interest in greater gas imports and that will allow Pemex to ally with private companies. .

"It is a door that opens to Grupo Carso and has been discounting in the markets in the last hours, is considering projects where the company has experience," said the specialist.

Since the announcement of changes in gas pipeline contracts, the price of Carso's shares between Monday 26 to Friday 30 August was revalued 9.7 percent.

Carlos Slim, during his speech at the National Palace, said there are 1,600 more infrastructure projects in which you can continue to participate in the development of the country.

"The entrepreneur who does not invest loses his ability to be in the market or loses his market share he had because others are going to do it," said Slim.