Time to Re-Engineer
Bloated with debt, Mexico's conglomerates have largely failed to reshape themselves into profitable, efficient companies capable of competing globally.
In the middle of last year with profits down 84%, Grupo
Cydsa, a Mexican textile and chemical conglomerate, sold $152
million-worth of subsidiaries and other assets in a vain effort
to keep current on its bank and bond debt. But by October, with
its banks pressing for payment and a $200 million bond
maturing, the company had to sell its Monterrey headquarters to
stay afloat. Cydsa managed to generate $60 million from the
sale, and with a decidedly lower profile, the company moved
across town and started paying rent. Like many conglomerates in
Mexico, Cydsa is majority-owned by a rich family unaccustomed
to scrimping on corporate trappings. However humiliating the
sale may have been for the González Sada family, it at
least helped the company win some support from its bankers.
"The new offices are modern and functional, but down-to-earth,"
says Antonio Ortíz, head of corporate banking at
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