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  • Morning Call

    October 20, 2020

    Yesterday, ALPEK announced that it acquired a 100% stake in NOVA Chemicals’ expandable polystyrene (EPS) business, which owns two facilities in the United States with a combined annual capacity of 168 Ktons of EPS, 36 Ktons of ARCEL®️, and an R&D pilot plant. The acquisition could represent an incremental EBITDA of ~5%, with an investment that is already considered in the total 2020 CAPEX budget. In our view, while this move is immaterial to our valuation, it is supportive of the company’s efforts to improve its capital allocation decisions.

     

    • GFAMSA informed that the relevant authorities approved the bankruptcy petition filed by its subsidiary Famsa México.

     

    • Yesterday, at an extraordinary shareholders’ meeting, BIMBO approved the cancellation of 169.4 million repurchased shares held in the treasury (3.7% of shares outstanding).

     

    • IENOVA’s Energía Costa Azul liquefaction project was voted yes by 60% of voting citizens in Ensenada’s popular referendum last Sunday.

     

    • Lundin’s Candelaria mine will suspend operations amid a workers’ strike, while BHP’s Escondida mine averted one after reaching a labor agreement with its workers. These mines, located in Chile, produced 146 and 1,190 Ktons of copper in 2019, each.

     

    • VOLAR will resume operations in Costa Rica on November 23, through its subsidiary based in that country.

     

    • Yesterday, the Senate’s Committee of Finance and Public Credit approved the elimination of 109 trusts. Legislative Affairs is now expected to discuss the bill, as its approval is necessary to be referred to the plenum of the Senate.