“COVID-19” impact: Mexico's Alfa to spin-off rest of its stake in Aluminium auto parts producer Nemak
The Mexican Multinational conglomerate Alfa announced on 31st July’20 that it projects to spin off the gross of its remaining 75% stake in aluminium automotive parts supplier Nemak.
As per the company: “If shareholders approve the proposal at an Aug. 17 meeting, they would receive one share of Controladora Nemak for each of their Alfa shares. They would also retain share ownership in Alfa's equity.”
Alfa President Alvaro Fernandez Garza said: "We plan a gradual and orderly transition process to make Nemak an independent business.”
Alfa said: “Controladora Nemak would be listed on the Mexican stock exchange following the spinoff. Nemak, which began to trade publicly in 2015, would continue to be listed as a separate entity. Nemak shareholders in the future would be able to decide whether to merge with Controladora Nemak.
Nemak, the producer of aluminium components for automakers, counting Ford, General Motors, Fiat Chrysler Automobiles and Toyota, saw Q2 results sharply strike by closedown of light vehicle manufacturing due to the COVID-19 pandemic.
The company posted a $125 million loss compared with a net profit of $42 million the year before, while revenue shrank 60% from the year-earlier period to $403 million -- making it the worst-performing of Alfa's publicly-traded companies.
Mexican bank Banorte said: “Investors were likely to cheer the separation of Nemak's risk from its parent company.”
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