Category: Chile

Chilean air carrier LAN is putting forward a plan to shareholders to expand its share capital by just over 22 million shares, overriding plans approved earlier this year to increase the capital by 7.5 million shares to finance growth of its fleet. According to a filing with the local stock exchange, the company’ shareholders are scheduled to meet to approve the plan on 5 April. LAN’s expansion plans over the next four years have an estimated cost of around $1.8 billion. The airline has units in Chile, Argentina, Ecuador and Peru and is said to be eying opportunities in Brazil.

Canadian methanol producer Methanex is preparing to list its shares in Chile, sometime in April or May, according to local daily El Mercurio. This will be the third foreign company to seek an offshore listing on the Santiago Stock Exchange: Endesa of Spain and Aur Resources of Canada are already registered. Methanex has four plants in the south of Chile, producing around 60% – or 3.8 million tons – of the company’s output. To date it has invested $1.3 billion in its Chilean facilities. The Vancouver-based company also said it had signed a Memorandum of Understanding with oil company Geopark, which provides for the long-term supply, development and acquisition of new natural gas reserves in Chile. Methanex’s production of methanol relies on the supply of natural gas, most of which comes from Argentina and is subject to shortages.

US energy management company PPL Corporation announced Tuesday that it intends to sell its regulated electricity delivery operations in Chile, El Salvador and Bolivia. The sale will be carried out via an auction process over several months, said the company. “Given that we have no intention of significantly growing our investment in Latin America, and that valuations are high for solidly performing electricity businesses in that part of the world, it is a good time to pursue this option for this relatively small portion of the PPL portfolio,” chief executive, James H. Miller, said. JP Morgan Securities will advise PPL.

Meantime, Chile’s consumer prices fell 0.2% in February, taking inflation for the 12 months through February to 2.7% from 2.8% in January. INE, the national statistics institute, said that core inflation remained unchanged. Chile’s Central Bank will meet to decide the future benchmark lending rate on March 15.

Moneda Deuda Latinoamericana Fondo de Inversion has become the first Chilean corporate bond fund to be rated by Standard & Poor’s. The fund, managed by a subsidiary of Moneda Asset Management, received an ‘A’ fund management rating, demonstrating “high standards of quality” based on the investment process, risk awareness, and consistency of performance relative to its own objectives.

Chile’s largest retail group, Distribución y Servicios (D&S) is planning to spend around $41 million to buy back all of its B-1 and B-2 series bonds. In a filing with the Santiago Stock Exchange the company said the buyback would take place on April 2. The buyback will help to reduce financing costs and will have a “positive but not substantive effect on the company”.

Chilean investments abroad rose to $1.77 billion in January, a rise of 281% compared with the same month last year, according to the country’s Central Bank. The largest part of the funds invested went into finance, insurance, property and services ($1.29 billion), followed by the mining industry ($419 million), manufacturing ($35 million), trade ($29 million and utilities ($18 million). Most of the money invested went to North America ($1.48 billion), followed by Europe ($115 million), Central America ($80 million), Asia ($76 million) and South America ($18 million). Within South America, Argentina took the lion’s share, or $10 million.

Vivendi Games said Tuesday that its subsidiary Sierra Online agreed to acquire Wanako Games, Latin America’s largest video games-maker, based in Chile, for an undisclosed amount. The two companies had worked together on a product prior to entering merger talks, according to Esteban Sosnik, Wanako’s chief executive who will become head of Sierra Online Latin America.

Chilean power company Colbún is preparing to issue up to $304 million worth of local bonds, the company said. The notes have been rated A+ by Fitch. The money raised from the bond issue will be used to finance investment, said Colbún. The power company has succeeded in improving its financial position in recent years – improving liquidity and extending its debt profile. The company has been investing in boosting generation capacity and expects three new facilities to come on line in 2007, generating an extra 145MW or 700 GWh a year.

Norway’s Cermaq, the world’s second-largest salmon farmer has broken off talks with Chile’s leading producer, AquaChile, according to a report by Reuters. The two producers between them account for 13% of the world market. Last month Cermaq sent notice to the Chilean securities commission that it was in contact with AquaChile with regard to a possible deal. Cermaq already has a presence in the Chilean market via its affiliate Mainstream and Alimentos Ewos.