Category: Argentina

ArcelorMittal has agreed to buy Venezuelan pipemaker Unicon for an undisclosed amount. Anticipating a rise in demand in the region, Arcelor is in the process of closing other purchases, including Argentina’s Acindar and M.T. Majdalani, and the remainder of Brazil’s ArcelorMittal Inox, formerly known as Acesita.

The board of Argentina’s Banco Macro has authorized a buyback of up to 30m shares worth up to ARS210m ($67m), the bank says. The repurchase, which the bank hopes will improve its share price, is expected to occur during the next six months.

The Argentine province of Cordoba is planning an international bond issue of $100m-$150m, likely in the next three months, Alejandro Henke, executive director of the province-owned Banco de Cordoba tells LatinFinance. The bank is currently negotiating with a group of investment banks to underwrite a larger debt program encompassing the offering. A roadshow is planned for North America and Europe. Despite Argentina’s tough times in the international credit markets, the province is optimistic on the deal. “The banks have told us they can get us rates comparable to what Buenos Aires Province had for its sale,” Henke says. He adds that that province and several corporates over the past year have already opened the doors for dollar offerings. Buenos Aires province issued $475m in 9.375% 2018 notes in October 2006. Cordoba notes proceeds will go towards infrastructure projects including hospitals and roads essential to exporting products from the province’s farms. They will also refinance debt in pesos and inflation-linked instruments.

Argentine government statistics agency INDEC released December inflation figures amid a bomb threat Monday. Its optimistic read was immediately called into question by analysts. The official line is that inflation is just 8.5% for 2007, down from 9.8% the year before. “The official data likely continues under-estimating true inflation trends,” says Goldman Sachs. “According to proxy indicators (e.g., tax collection and supermarket sales data), actual inflation hovered at 16% to 20% in 2007, more than doubling the official print.” It adds that price rises pose a major policy challenge for the authorities in 2008 but predicts a pullback to 11% inflation in 2008 on the back of tighter fiscal policy. The headquarters of INDEC was evacuated Monday due to a bomb threat, according to Dow Jones, citing an INDEC union official.

Argentine government statistics agency INDEC released December inflation figures amid a bomb threat Monday. Its optimistic read was immediately called into question by analysts. The official line is that inflation is just 8.5% for 2007, down from 9.8% the year before. “The official data likely continues under-estimating true inflation trends,” says Goldman Sachs. “According to proxy indicators (e.g., tax collection and supermarket sales data), actual inflation hovered at 16% to 20% in 2007, more than doubling the official print.” It adds that price rises pose a major policy challenge for the authorities in 2008 but predicts a pullback to 11% inflation in 2008 on the back of tighter fiscal policy. The headquarters of INDEC was evacuated Monday due to a bomb threat, according to Dow Jones, citing an INDEC union official.

Light New Year’s relief to hostile markets, skimpy bonuses and investment bank layoffs comes in the form of an animated cartoon produced by American Task Force Argentina (ATFA), the holdout bondholder lobby group. Set to a musical mix of seventies TV soundtrack, 80s videogame effects and theatrical melodrama, “Hugo’s Deal or No Deal” is a lighthearted look at last year’s Argentine cash-in-suitcase saga. The animated short, full of grotesque caricatures, closes with the newspaper headline: “Christina Wins Election With A Little Help From Her Friends.” Six years on from the $100bn sovereign default, it’s not clear what AFTA, supported by large investors like GMO and hedge funds like Greylock and Elliott, can hope to salvage. It has delivered thousands of letters, made YouTube protests and even driven a truck around New York advising the administration to get some respect and pay its debt. But Christina appears unlikely to deal with holdouts any time soon. Nonetheless, AFTA says the animated short is the first in a series “highlighting economic challenges in Argentina.” Watch out for more entertainment coming your way.

Petrobras Energia has sold its 40% stake in Argentine petrochemical company Petroquimica Cuyo to Admire Trading Company and Grupo Inversor Petroquimica. Petrobras said the sale price was $32m, which is expected to provide an accounting gain of about ARP39m.

YPF, the Argentine unit of Spain’s Repsol YPF, plans to sell publicly at least a 20% stake in a global offering between the second and third quarter, according to an executive familiar with the company’s plans. Assuming a $15bn market value, that could result in an offering of well over $3bn, says the source. An Argentine listing is planned and will likely be accompanied by placements in New York and/or London. Separately, the company has confirmed plans to sell 14.9% to an equity group headed by Argentina’s Eskenazi Family and the Petersen Group. That agreement comes with an option to sell to the buyers an additional 10.1% at any time thereafter. The deal is being financed with a $1.02bn loan led by Credit Suisse, including participation from BNP Paribas, Goldman Sachs and Itau. It will be syndicated out in the first couple months of the year to a second tier. The loan has an average life of three years and pays basis Argentine 3-year CDS, with a margin that translates into Libor plus just over 500bp. Morgan Stanley, formerly part of the lending group, is heard to have quit due to concerns relating to the US credit crisis. The US investment bank declined to comment on the rumor.

Chilean retailer Falabella plans to invest $2.58bn in 2008-2011, including $1.65bn on expanding department stores in Argentina, Colombia, Chile and Peru. The investment plan aims to increase the number of Falabella department stores to 100 from 63, Sodimac home stores to 178 from 84 and Tottus supermarkets to 45 from 29. It does not account for the planned merger with supermarket chain Servicio D&S, awaiting regulatory approval, which would create South America’s largest retailer.

Houston-based Noble Energy agreed to sell its interest in the El Tordillo, La Tapera, and Puesto Quiroga concessions in southern Argentina to a unit of Petrobras for $117.5m. Noble expects after-tax proceeds of $80m from the deal expected to close in 2008.