January 23, 2014 / 4:00 AM / in 4 years

Mexico's ICA to sell stake in prison business for $113 mln

MEXICO CITY, Jan 22 (Reuters) - Mexican construction company ICA on Wednesday said it had reached a deal to sell a majority stake in its prison business to a subsidiary of privately held Hunt Companies Inc for 1.5 billion pesos ($113 million).

ICA will sell 70 percent of two 22-year prison service contracts to Hunt unit CGL. ICA will retain the other 30 percent stake in the contracts, in which it invested more than $1 billion, the firm said in a statement.

The deal, which would also let ICA unload some of its debt and which is subject to approval from Mexican authorities, also includes plans for a joint venture with CGL to seek more prison projects in Mexico, ICA said.

About 10.1 billion Mexican pesos of debt related to the prison contracts will be split under the deal, the company said. Credit Suisse analysts said in a note that interest payments on the debt in 2014 was set to be 1 billion pesos.

Shares in ICA closed up 0.38 percent at 26.26 pesos on Thursday.

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