Salinas Moves to Delist Flagship Elektra in Wake of Share Plunge

The Mexican retail and banking conglomerate Grupo Salinas, controlled by billionaire Ricardo Salinas Pliego, has announced plans to delist its flagship company, Elektra, from the Mexican Stock Exchange (BMV) and Latibex, a market for Latin American securities on the Spanish stock exchange. This move comes in the wake of a significant decline in Elektra's share price, which plummeted 71% on December 6, 2024, leading to a loss of half of Ricardo Salinas Pliego's wealth and removing him from the Forbes 500 list of the world's wealthiest individuals.

Elektra, which operates in the retail and financial services sectors, has faced a series of challenges in recent years, including a prolonged suspension of trading, removal from the S&P/BMV IPC index, and ongoing legal battles. The company's shares were suspended in July 2024 due to a possible fraud by depositaries of their shares. When trading resumed in December 2024, the shares were valued at 50% less than their previous value, triggering a circuit breaker at the stock exchange. However, the Mexican securities regulator, CNBV, overruled the circuit breaker, allowing trading to continue.

The low valuation of Elektra's shares resulted in a significant loss of wealth for Ricardo Salinas Pliego, who saw his fortune halved and his name removed from the Forbes 500 list. The fraud allegations and legal battles, combined with the prolonged trading suspension and the subsequent low valuation of the shares, contributed to the decline of Elektra's share value.

The delisting of Elektra from the Mexican Stock Exchange and Latibex is expected to be completed in the first half of 2025. The company has called a shareholder meeting to discuss the privatization and delisting of its shares. Ricardo Salinas Pliego, who owns approximately 75% of Elektra's shares, is expected to support the delisting, as it would allow the company to reorganize strategically and potentially improve its financial performance.

However, the delisting process could face challenges and delays, potentially leading to legal implications for Ricardo Salinas Pliego. If the delisting is challenged or delayed, Salinas Pliego could face liability for breach of fiduciary duty, fraud allegations, market manipulation, securities law violations, and reputation damage. These potential legal implications could have a significant impact on Ricardo Salinas Pliego's other business ventures and investments within the Grupo Salinas conglomerate.

The delisting of Elektra and the related issues could also create a contagion effect, with investors and lenders becoming more risk-averse when dealing with other companies within the Grupo Salinas conglomerate. This could lead to increased scrutiny and higher financing costs for these companies, potentially affecting their stock prices and access to financing.

In conclusion, the delisting of Elektra from the Mexican Stock Exchange and Latibex is a significant move by Ricardo Salinas Pliego to reorganize his flagship company in the wake of a substantial share price decline. However, the delisting process could face challenges and delays, potentially leading to legal implications for Salinas Pliego and impacting his other business ventures and investments within the Grupo Salinas conglomerate.