Commonwealth Acquires CCI Stake

The Commonwealth Development Corp. (CDC) has recently paid $20 million for a 4.065% stake in the Argentinean roadways management company Concesiones y Contrucciones de Infraestructura SA (CCI).

Seraio Arce, an investment executive with CDC, said that of the $20 million CDC invested, $10 million was in the form of a convertible loan with the other $10 million coming in equity.

Darby Overseas Investments Ltd. of Washington, D.C., invested an additional $20 million in mezzanine financing through its Darby Latin American Mezzanine Fund (DLAMF) last August.

The International Finance Corp. (IFC), which is part of the World Bank Group, owns 8.13% of CCI, while the construction companies Aragon and Sevente together have a 87.8% stake in the company. The IFC also put up $40 million last August.

CCI has concession contracts over the Buenos Aires-La Plata highway, as well as through Mar del Plata, Ezeiza-Canuelas and Arturo Ilia.

Arce said this investment represents CDC’s first deal in Argentina and in toll roads.

“The toll road industry in Latin America is new – about 10 years old,” he said. “Governments have been planning solutions to their road problems, and one way has been to privatize. Argentina’s toll roads are very developed, but there’s a lot of toll road players in Brazil-CCI’s main target.”

In terms of possible exit strategies, Arce said his firm has a three-year horizon, and he is confident an IPO is possible. “It’s part of our contractual agreement to go public,” he said, but added he wouldn’t be averse to finding “an international player.”