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Development of additional social infrastructure is objective of joint venture
CGL will own 70% and ICA 30% of existing services contracts
MEXICO CITY and MIAMI, Jan. 22, 2014 (GLOBE NEWSWIRE) -- Empresas ICA, S.A.B. de C.V. (BMV:ICA) (NYSE:ICA), the largest infrastructure and construction company in Mexico, and CGL, an international public facility design, management, and maintenance firm, today announced the formation of a joint venture for managing and developing additional social infrastructure facilities in Mexico.
ICA is contributing two 22-year Service Provider Contracts (SPCs) for providing non-correctional services at two federal penitentiaries in Mexico, in which it has invested approximately Ps. 13,768 million (US$1,060 million) in design, construction, equipment, and putting into service. CGL will pay ICA Ps. 1,511 million, or approximately US$116 million, for a 70% equity interest and ICA will retain 30%. The joint venture will carry out the two existing services provider contracts and plans to develop additional justice facilities in Mexico.
The two services contracts were awarded to ICA in 2010 and began their operating phase in the fourth quarter of 2012. ICA developed the state of the art facilities with the technical assistance of CGL. The facilities are owned and operated by the federal government. Today's agreement is a further development of the collaboration between ICA and CGL.
"We are extremely excited about our first major investment in the Mexican justice infrastructure market, as well as our continued relationship with ICA as our partner," said Buddy Johns, Chief Executive Officer for CGL. "This relationship creates a team with unparalleled knowledge and experience in this sector. Our investment solidifies CGL's years of commitment to the evolving justice market in Mexico and becomes a platform in which to assist in the future development of other necessary projects throughout the country."