Fibra E Fiemex raises 4.5 billion pesos in its stock market debut

The Mexican Energy Investment Trust (Fiemex) launched an Initial Public Offering on the Mexican Stock Exchange, as part of the Mexican government's plan to finance the purchase of 13 power plants from the Spanish giant Iberdrola.

The fiber, managed by Mexico Infrastructure Partners (MIP), is the investment vehicle hired by the Mexican government to manage the trust and the $4.5 billion it sought through the sale of various series of securities.

The trust will invest in "electric power generation projects that carry out activities under the terms of the Electricity Industry Law," the company wrote in the transaction prospectus.

Fiemex sold a total of 43.6 million energy and infrastructure investment trust certificates (CBFEs) offered to investors at a price of $103.20, or approximately 1,948 pesos.

The new Fibra E, whose ticker symbol is 'FIEMEX', has a portfolio of 13 plants—12 combined-cycle plants and one wind power plant—spread across seven states with a combined capacity of 8,539 megawatts.

While Iberdrola sold these plants as part of a plan focused on expanding its installed renewable energy capacity, the plants it sold to Mexico, located in Nuevo León, Oaxaca, Tamaulipas, Durango, San Luis Potosí, Baja California, and Sinaloa, still have a remaining useful life averaging 24 years.

Iberdrola sold the 13 plants to the government of former President Andrés Manuel López Obrador for $6.15 billion, representing approximately 55% of its business in the country.

MIP signed the agreement with the Spanish company in mid-2023. Mexico holds a majority stake in these plants through Mexico's National Infrastructure Fund (Fonadin).

The acquisition was initially financed through the issuance of development capital certificates for $2.4 billion acquired by Fonadin and the contracting of debt for approximately $3.9 billion—$1.9 billion from five private banks and $2.5 billion from development banks.

Fonadin retained 65% of the total issued Capital Development Certificates (CKDs) and sold the remaining 35% to various retirement fund managers.

Of the CBFEs issued by the new FIBER, 64.59% remained in the hands of Fonadin, 33.67% belong to Afores and other investors, and 1.63% remained as performance certificates that MIP could receive if it meets certain minimum distributions.