Category: Colombia

A Colombian judge has ordered the arrest of the president and vicepresident of the country’s largest financial institution Bancolombia. According to local media reports, Jorge Londoño Saldarriaga and Federico Guillermo Ochoa are wanted for questioning in relation to misuse of funds during the merger process in 1998 of Banco de Colombia with Banco Industrial Colombiano. Several minority shareholders have launched a claim against bank executives who, they claim, defrauded them of profits.

Colombian state-run oil producer Ecopetrol has taken a 5.78% stake in state-controlled electricity distributor Interconexión Eléctrica SA (ISA) after exchanging its shares in local firm Transelca. In return, ISA gains control over electricity transmitter Transelca by taking over Ecopetrol’s 34.99% holding in the company which serves Colombia’s Atlantic coast. ISA was partially privatized in 2000 and has become a key regional player in the sector, expanding into Panama, Peru, Ecuador, Bolivia and Brazil.

Colombia’s cumulative inflation rate for 2006 was 4.48%, with consumer prices increasing 0.23% in December, driven by price rises in transport and costs of entertainment goods and services, according to DANE, the national statistics agency. Annual inflation in 2006 was within the 4% to 5% range targeted by the government and compares with the rate of 4.85% posted in 2005.

Peru’s investment promotion agency ProInversión has closed the sale of the state’s remaining 15% stake in local electricity transmission company Consorcio TransMantaro to two Colombian utilities. Colombia’s largest energy provider, state-controlled Interconexión Eléctrica SA (ISA), together with state-owned Empresa de Energía de Bogotá (EEB), bought the remaining government stake in auction in September for $17.7 million, topping the minimum price of $15.2 million set by the government. The Colombian companies went on to pay $33 million in November for the final 28% stake outside their control owned by Canadian Fonds de Solidarité des Travailleurs du Quebec de Canada to take a 100% stake in the Peruvian utility.

International investment fund Ashmore, based in London, has taken control of Colombian natural gas distribution company Promigas after increasing its 33% stake to almost 43%. Ashmore, via its subsidiary AEI paid $160 million for a 9.9% stake owned by local financial entity Corficolombiana. In August Ashmore paid $350 million for a 33% share of the distributor after it acquired Prisma Energy, owners of the holding. Promigas is the largest private natural gas transmission company in the country and transports around 65% of natural gas in Colombia.

Electricity distributor Codensa, the Colombian subsidiary of Spanish utility Endesa, is to issue $292 million worth of local bonds (650 billion pesos). Codensa is Colombia’s largest energy provider, with a market share of 22%.

Colombia’s largest financial institution, Bancolombia, is grabbing a larger slice of the action in Central America after it agreed to acquire Salvadorian financial group Banagrícola. Bancolombia has agreed to buy at least 52.9% and up to 100% of the Group for between $460 million and $900 million in cash via its subsidiary Bancolombia Panamá. Banagrícola owns local bank Banco Agrícola, which has a 29% share of all deposits and loans in El Salvador, as well as the leading insurer – Asesuisa – which has a 23% domestic market share. The Group also owns pension fund AFP Crecer and brokerage company Bursabac. Bancolombia Panamá will make, simultaneously, public offerings in Panama and El Salvador for all the ordinary shares of Banagrícola at $47 per share. The offerings will be made as soon as the acquisition is approved by regulators. Bancolombia hopes to close the deal in the second quarter of 2007. UBS acted as financial advisor to Bancolombia.

The International Finance Corporation (IFC), the private-sector arm of the World Bank, is collaborating with Titulizadora Colombiana and Banco de Crédito del Perú to set up Peru’s first secondary mortgage market company, Titularizadora Peruana. The company, which will have an estimated capital of $3.6 million, “will acquire residential mortgage loans and structure mortgage-backed securities to develop the secondary mortgage market and expand access to housing finance in Peru”, said the Corporation. IFC has already approved a credit line of $50 million for Titulizadora Peruana to acquire a mortgage portfolio and improve the conditions of structured securities. The aim of IFC is to replicate the model of Titularizadora Colombiana and Hipotecaria Su Casita, two IFC-backed institutions, that have helped to develop the MBS markets in Colombia and Mexico, respectively.

Mobile phone operator Colombia Movil, acquired earlier this year by Luxembourg-based Millicom, is planning to sell 9.25 million shares in the local stock market, the company informed the country’s securities regulator. The company will issue preferred and non-voting preferred shares. The share price is due to be set next week.

Colombian cement producer Cementos Argos has closed a $480 million syndicated loan through Citigroup Global Markets and BNP Paribas Securities, after receiving commitments of up to $648 million, said the company. The loan takes advantage of the liquidity in the market and will be used to pay down debt. Cementos Argos is part of the country’s largest conglomerate – GEA.