February 8, 2000 -- MEXICO CITY, (Reuters) - Mexican bank deposit guarantee agency IPAB said Sunday it was starting
the sale of the third and final tranche of Camino Real luxury hotels, formerly an asset of failed Banco Union.
The third portion includes property and plots of land at two resorts on Mexico's Caribbean coast and one on the
Pacific coast.
IPAB, formally known as the Institute for the Protection of Bank Savings, was created last year to succeed the
bank rescue fund Fobaproa and to complete a $100 billion rescue of Mexico's financial system.
Mexican banks crumbled under bad debt during the 1994-95 economic crisis, when interest rates soared, forcing many
to default on loans.
The sale will be carried out by CMI Staubach, which will invite bids exclusively from Mexico's main real estate
firms, IPAB said in a statement. Interested parties have to bid for each of eight packets separately.
``This transaction complements the process of selling property assets from the Camino Real chain, which started
last December and is expected to end during the second quarter of this year,'' said IPAB.
IPAB did not say how much it aimed to raise through the sale, other than ``the maximum value in the shortest possible
time''.
Packet No. 1 includes Camino Real hotels in Cancun, Guadalajara, Puerto Vallarta, Acapulco, and El Paso, Texas;
21 percent of the Camino Real in Saltillo; and management contracts for 16 Camino Real hotels. The sale is being
conducted through financial agent Hodges Ward Elliott Inc.
The sale of package No. 2 -- a hotel in the southeastern state of Chiapas, a 62 percent stake of a hotel in Villahermosa,
Tabasco and a property in Mazatlan on the Pacific coast -- was arranged by Spain's Banco Bilbao Vizcaya.
The government took over Banco Union before the crisis in 1994, amid allegations of fraud. Its former owner, a
one-time banana planter turned business mogul named Carlos Cabal Peniche, is in Australia where he recently lost
an appeal against extradition to face charges of fraud worth some $700 million.
In November, Goldman Sachs investment bank led a group that paid 842.56 million pesos, or some $90 million, to
manage 7.7 billion pesos ($815 million) of bad debt once belonging to Banco Union.