GCC pulls out of US$100m investment

GCC pulls out of US$100m investment
Published: 22 July 2011

Mexican cement firm Grupo Cementos Chihuahua has suspended a planned US$100m investment in a Bolivian housing project, citing a lack of legal security, according to Bolivian GCC partner Samuel Doria.

"We were completing a study to implement a social housing project in Bolivia, and were planning to invest US$100m in the project, but due to legal insecurities [GCC] decided not to make the investment," Mexican press quoted Doria as saying.

Last September, Bolivia’s national government transferred 33.4% of private cement firm Soboce’s shares in state cement producer Fancesa to the Chuquisaca department government. GCC has a 47% stake in Soboce, which it purchased in 2005.

The government established a 180-day period to pay off the shares, which Soboce estimates are worth some US$280mn. However, the government has yet to make the payment, according to Doria.

Soboce has begun setting up international arbitration proceedings against the government over the nationalization, Bolivian daily La Razón reported.