ACS shares fell by 2.3% in the first few hours of the session on Monday, to 39.9 euros per share, after it was announced late on Friday, with the market already closed, that the Texas Transportation Commission (United States) has decided to bring forward the termination of the concession contract for a highway owned by the ACS Group and Abertis.
Specifically, under the current contract, the SH-288 highway in the Houston metropolitan area will once again be transferred to the State of Texas through a payment of 1.732 billion dollars (more than 1.547 billion euros), of which 524 million dollars (484 million euros) correspond to Iridium Infraestructuras, a subsidiary of the ACS Group.
According to the company’s statement to the National Securities Market Commission (CNMV) last Friday, the termination of the contract, net of provisions and other results, including that of Abertis, will not have a significant impact on the ACS group’s expected consolidated net profit for 2024.
For its part, Abertis, controlled by ACS and the Italian Mundys, informed the CNMV on Sunday that the termination of this concession will mean a net accounting loss of around 418 million euros in 2024. In its statement to the supervisor, Abertis regretted that the negotiations held to date with the Texas Transportation Commission have not reached a “successful conclusion”, which will now avail itself of the termination for convenience clause included in the contract, effective on October 8, 2024 through the payment of compensation of 1,732 million dollars.
This amount will be used to repay approximately 520 million dollars (466 million euros) of net debt of the project, currently consolidated by Abertis. In addition, the company will receive a cash inflow of 688 million dollars (617 million euros) for its 56.76% stake, so the positive impact on the company’s financial position will amount to 1,208 million dollars (1,083 million euros). For its part, ACS will receive 524 million dollars (484 million euros) through its subsidiary Iridium Infraestructuras.
Abertis explains that the termination of the concession will result in an accounting loss of approximately 555 million euros net of taxes, before the application of provisions. Taking into account the reversal of provisions, the termination will result in a net accounting loss of approximately 418 million euros in the current year. “In addition, depending on the evolution of various factors, extraordinary income could be generated before the end of the year that would mitigate the impact on the net result of the year,” adds the company, which expects that this operation will not impact its credit rating or its dividend policy.
The SH-288 highway, owned by the ACS Group and Abertis, is one of the most important infrastructure projects undertaken in the Houston metropolitan area. After opening to traffic in 2020, it contributes significantly to alleviating congestion problems in one of its most populated areas.
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