Analysts Not Bullish on Dina
July 19, 2000
Mexico’s Consorcio G Grupo Dina deferred a $6.5 million interest payment on convertible debt, prompting speculation from financial analysts that the company is in trouble.
According to Reuters news service, Dina said it could sell assets to make the payment and noted that it had a 30-day grace period to make the payment. The company also said it could not guarantee it would make the payment.
One financial columnist called this “a new stage of (Dina’s) prolonged crisis.” In 1999 the company was forced to sell 61% of its U.S. subsidiary MCII Holdings, which accounted for 80% of its revenues. Its biggest truck customer, Western Star Trucks, reduced truck orders for the third quarter, forcing Dina to cut production. Now Freightliner, which has just announced a deal to buy Western Star, says it is reviewing medium-duty trucks built by Dina. And in the Mexican market, Dina faces tough competition from Freightliner, Navistar International, and Paccar.