Eduardo Eurnekian is preparing to sell shares for the first time in New York as Argentina’s second-richest family expands its global conglomerate spanning airports, energy and semiconductors.
Eurnekian’s Corporacion America is studying the structure of assets to be marketed in initial public offerings next year and will open a New York office by March, the 81-year-old billionaire said in an April 25 interview from his offices in Buenos Aires. The group has yet to hire an advising bank.
“A first stage is opening to the market and showing the company’s will to grow,” he said. “It’s not a cash-out situation.”
Eurnekian, whose Armenian immigrant parents owned a textile business, introduced cable television to Argentina through Cablevision SA and founded television networks including America TV. Today, Corporacion America is the world’s largest private airport operator by number of licenses, with more than 50, and about $2 billion in annual sales.
Most recently, the company won bids to operate the Pisa and Florence airports in Italy and is bidding for as many as 21 airports in Greece as the country accelerates a privatization process to recover from its economic crisis. The company said April 25 that it won bidding to build and operate a new airport to service Cuzco and Machu Picchu in Peru.
Eurnekian’s Aeropuertos Argentina 2000 SA, which operates more than 30 airports in the South American nation, sold $300 million of dollar bonds in 2010. The notes rose 0.07 cent to 99.62 cents on the dollar at 3:10 p.m. in New York, leading the yield to drop 0.03 percentage point to 10.88 percent, according to data compiled by Bloomberg.
Eurnekian will wait for “the right moment” to decide the size of equity to be sold on the stock exchange, while keeping control of the ventures, he said.
The group “will obviously have to adapt” to regulations as an international publicly traded entity, he said. Eurnekian declined to give a valuation for Corporacion America, saying he doesn’t think about how much his assets are worth.
“It may be worth $15 billion, or $20 billion or $40 billion, I don’t know,” he said. “When you work all day you don’t think about valuations.”
Nephews Hugo, Martin and Matias handle Eurnekian’s energy, airports and technology operations, respectively. Those units are the most likely to go public as early as next year, he said.
Matias, who runs microchip startup Unitec Blue, negotiated the company’s foray into Brazil earlier this year, partnering with development bank BNDES and International Business Machines Corp. (IBM:US) to buy Eike Batista’s 33 percent stake in SIX Semicondutores SA for 40 million reais ($18 million). The venture, based in Belo Horizonte, will be renamed Unitec Blue.
Eurnekian, who was born in Argentina, has invested heavily in his ancestral home of Armenia, running the main airport, postal service, a bank and vineyards.
The group’s wine business, which in Argentina is produced under the Bodega del Fin del Mundo label, is an example of entering new industries that provide satisfaction without worrying about margins, he said.
“I don’t know if I lose money making wine,” Eurnekian said. “But I gain in satisfaction.”
In Argentina, he sees considerable potential in energy and said his newly acquired Cia. General de Combustibles SA will seek partners with oil and gas concessions to form ventures and to exploit wind energy potential in Patagonia.
The South American country’s state energy company YPF SA (YPF:US) formed a venture with Chevron Corp. last year to drill in the Vaca Muerta formation that holds the world’s second-largest shale gas and fourth-largest shale oil reserves. The previous year, Corporacion America signed a $500 million Memorandum of Understanding with YPF to develop parts of Vaca Muerta. Argentina posted a record $6.1 billion energy deficit last year after having run surpluses for 20 years through 2010.
“Argentina has huge advantages over other countries in terms of energy potential,” Eurnekian said. “YPF has large proven reserves that they need to begin producing. The faster they find partners with expertise, the faster the country will be self-sufficient.”
Assets in Argentina are still inexpensive, Eurnekian said.
“Compared with Brazil, they’re cheap,” he said.
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