Mexican multinational group Alfa plans to spin-off auto supplier Nemak and list it on the Mexican stock exchange. The company holds 75pc stake in Nemak.
Nemak manufactures auto components at 38 facilities across the world and is a supplier to automakers like Ford, General Motors, Fiat, Chrysler automobiles and Toyota.
Alfa announced that the final decision will be taken if the company’s shareholders approve its proposal on August 17. Shareholders would receive one share of Nemak for each of their Alfa shares.
Nemak’s reported weak Q2 results as overall light vehicle production got affected as a result of COVID-19 situation. Nemak posted $125mn loss in Q2 as against $42mn profit in the same period the year prior.
Mexican bank Banorte reported that this decision would bring cheer among the investors of Alfa.
Alfa group owns 82pc in petrochemical company Alpek and 53pc in telecommunication company Axtel in addition to food products company Sigma and oil and gas company Newpek.
The company will be selling the majority of its assets in Newpek before the end of the current year.