By Noel Randewich and Gabriela Lopez
MEXICO CITY (Reuters) - Homex, one of Mexico's largest home builders, expects to see positive free cash flow in 2006 for the first year ever and may use some of the funds to pay down debt, its chief executive said on Wednesday.
Homex HOMEX.MX (HXM.N: Quote, Profile, Research, Stock Buzz) and other large fast-growing players in Mexico's soaring housing industry have plowed money into growth in recent years, but some firms are now beginning to produce positive free cash flows.
CEO Gerardo de Nicolas said in an interview at the Reuters Latin America Investment Summit that Homex, which expects to grow its revenues by about 38 percent in 2006, may use some of its cash this year to prepay some of its $300 million in debt.
Culiacan-based Homex's debt consists of a $250 million 10-year bond and another credit for about $50 million.
Homex and competitors like Ara (ARA.MX: Quote, Profile, Research, Stock Buzz) and Geo GEOB.MX have built millions of homes across Mexico in recent years amid a boom sparked by falling interest rates, increased economic stability and strong backing from President Vicente Fox, whose term ends this year.
They specialize in putting up neighborhoods of hundreds or thousands of houses that sell for less than $20,000 per home.
Last year Homex bought smaller competitor Casas Beta for the equivalent of more than $200 million in order to speed up its expansion in the fast-growing sector.
Thirty-seven year-old De Nicolas said he was open to future acquisitions, but that they would likely not be as large as the Beta deal. Continued...
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