Category: Colombia

Chilean financial group Ripley International has received the go-ahead from Colombia’s financial regulator to establish Ripley Financiera, in partnership with retailer Carulla Vivero – recently bought by local rival Almacenes Éxito. Financiera Ripley, as it will be called, will have paid-up capital of $6 million. Meanwhile, US investment bank JP Morgan Chase & Co will have to wait until November to formally set up its financing firm in Colombia. The Bank was given the green light in July by the country’s banking regulator to set up a subsidiary, authorized to carry out investment banking and debt trading in the local market.

Colombia’s largest energy provider, state-controlled Interconexión Eléctrica SA (ISA), together with state-owned Empresa de Energía de Bogotá have increased their control of Peruvian electricity transmission company Consorcio TransMantaro. They bid $17.7 million Thursday, the sole bidder at the auction to buy the remaining 15% stake held by the Peruvian state. Peru’s investment agency ProInversión had earlier set a minimum price of $15.2 million. In May the Colombian firms bought 57% of the TransMantaro from Canada’s Hydro-Québec for $67 million. The Quebec Federation of Labour Solidarity Fund owns the remaining 28% stake.

One of the largest shareholders of Colombian natural gas distribution company Promigas is to sell its 33% holding in the company for around $350 million in November. EMHC of the US has said it will sell the shareholding in Promigas to Prisma Energy Internacional, a subsidiary of Enron, via the Colombian Stock Exchange. Promigas is the largest private natural gas transmission company in the country and transports around 65% of natural gas in Colombia.

Colombia’s government is dropping its controversial 10% VAT on staple foods, put forward in its tax reform bill currently under review by the country’s Congress. The bill seeks to reform and streamline taxes and promote investment. Among changes sought by the government was the introduction of an additional level of VAT, rated at 10%, on staple foods. The VAT change was always likely to meet resistance in Congress as it will have a particularly strong impact on the lowest levels of society.

Colombia has signed oil exploration and production contracts with Canada’s Petrominerales and local firm Sogomi Energy, taking to 24 the E&P contracts signed so far this year by the state. The companies will be able to carry out exploration in a block each in the Llanos oil basin. Colombia has been keen to attract foreign investment to its hydrocarbons industry and aims to sign a total of 30 E&P contracts this year. Crude production this year has risen to around 600,000 barrels per day (bpd) up from 500,00o bpd last year.

Colombia’s largest energy provider, state-controlled Interconexión Eléctrica SA (ISA) and state-owned Empresa de Energía de Bogotá are to bid for a greater stake in Peruvian electricity transmission line Consorcio TransMantaro when it comes to the block on Monday, September 11. The two Colombian firms are planning to buy an additional 15% share to add to the 57% of the company they bought from Canada’s Hydro-Québec in May for $67 million. The share acquisition will add to ISA’s growing presence in the regional power market.

Colombia was also tapping international markets yesterday, Wednesday, when it sold $1 billion of a new global bond, due in 2037 to fund the buyback of up to $700 million of foreign-currency bonds. The bonds were sold at a yield of 7.453% – 250 basis points above comparable US treasuries – and carry a coupon of 7.375%. The sovereign offered to buy back its 2020, 2027 and 2033 issues, which together account for $700 million. The buyback is part of the government’s strategy of altering the profile of Colombia’s debt. The sale is being managed by Goldman Sachs and Merrill Lynch.

Luxembourg-based Millicom has won control of Colombia Móvil, known as OLA, the country’s third-largest mobile phone company, after revising its bid to $478.5 million, the minimum price accepted by OLA’s owners – Empresa de Telecomunicaciones de Bogotá (ETB) and Empresas Públicas de Medellín (EPM) – Colombia’s two largest telcos. Millicom will now control 50% plus one share of OLA’s capital. Caribbean-based Digicel Group, the only other qualified contender in the race, failed to present a bid, leaving Millicom to negotiate a price directly with ETB and EPM.

Foreign-owned BBVA Colombia sold $37 million of local currency bonds Monday, slightly less than the $40 million it had originally planned. The five-year bonds will pay an annual interest rate of inflation plus 5.2%, the maximum the bank said it would pay. The bond issue, rated AA+ by Duff & Phelps de Colombia, is part of a larger debt issuance program worth $166.8 million in total, approved earlier this year by the Bank’s shareholders.