Category: Colombia

Foreign-owned BBVA Colombia is planning to place local currency bonds worth $4.7 million today, Monday. The five-year bonds will offer a maximum annual interest rate of inflation plus 5.2%. 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.

Anglo-South African brewer SABMiller is to invest $277 million in the Andean region. Its Colombian subsidiary Bavaria has committed $175 million to replace a brewery facility in Cali, to increase capacity to 4.5 million hectoliters by 2009. Meantime, SABMiller’s Peruvian unit, Backus and Johnston will plough $102 million into new brewery facilities and packaging capabilities in the country. The subsidiary also plans to merge with Cervesur, a majority-owned affiliate, to streamline and simplify operations in Peru.

Three bidding groups that were originally excluded from the race to win the operating concession for Bogotá’s international airport, El Dorado, will now be included, according to Aerocivil, Colombia’s civil aviation authority. The Authority recently delayed the date of selecting a winner from August 18 to August 28 to reevaluate documentation presented by Corporación América, Siemens together with Colpatria, and Stratis. The three groups, together with ASA and Opaín will be considered for the 20-year concession to run the airport, with the winner expected to invest around $650 million to modernize the country’s largest airport.

Colombian cement-producer Cementos Argos, part of GEA, is to invest $320 million in constructing a cement plant in Cartagena. The plant, which will produce up to 1.6 million tonnes of grey cement a year, is due to be on line in 2009 and will help to supply the company’s newly acquired concrete factories in North America. Argos is currently constructing three coal-fired plants in the country, at a cost of $33 million, to become self-sufficient in energy by next year.

Juan Camilo Ochoa Restrepo, president of Medellín-based Suramericana de Inversiones, Suraminv, has resigned from his post. Ochoa was appointed president of Suraminv in April 2004 but had worked for Colombia’s largest conglomerate Grupo Empresarial Antioqueño (GEA), which owns Suraminv, for the past 16 years. Ochoa will be replaced by David Bojanini García from October 1. Bojanini is currently president of Medellín-based pension fund administrator Protección.

Colombia’s leading retailer, Almacenes Éxito, which announced just days ago it had agreed to buy a 19.8% stake in rival Vivero Carulla for $110.5 million, may buy up to 77.5% of the company. Éxito says it will finance the acquisition via a bank loan for up to $300 million, a share offering of 24.7 million common shares at $4.44 per share, and its own funds. Éxito is owned by local conglomerate Grupo Empresarial Antioqueño (GEA) and French company Casino.

Following months of speculation, Colombia’s second-largest retail chain Carulla Vivero – controlled by US investment fund Newbridge Andean Partners – has finally selected a strategic partner. Much to the surprise of the market, Carulla has agreed to sell a 19.8% stake to its rival, the number one local chain Almacenes Éxito, controlled by Grupo Empresarial Antioqueño, for $110.5 million. Several weeks ago Carulla Vivero mandated Credit Suisse to search for a strategic partner for it. The most likely buyer was thought to be international and names put forward included French retailer Carrefour, Chilean retailers Ripley, Cencosud and Falabella and even US behemoth Wal-Mart.

Colombia’s state-controlled Bancoldex has raised $42 million via the sale of local-currency notes. The bank sold the bonds at a yield of 8.29% with a 31-month maturity. The notes are the third tranche of a larger debt issue, totaling $420 million. The company is still due to issue $211 million of the debt paper, which will be sold before the end of this year or next. The notes are rated AAA by Duff & Phelps Colombia. Bancoldex is a mixed economy public limited company, attached to the ministry of foreign trade.

Colombia’s Central Bank Friday raised its benchmark interest rate to 6.75% on the back of higher-than-expected July inflation. The 25 basis points increase in the overnight lending rate was in line with market expectations. Annual inflation through July rose to a six-month high of 4.32% fueled by higher consumer spending.

Cementos Argos, Colombia’s largest cement producer, has sold $105.8 million worth of commercial paper in the domestic market. The amount of paper issued was raised from $60 million in the face of strong demand from local investors. Argos sold 180-day and 12-month paper with rates equal to the benchmark DTF plus 1.24% and 1.42% respectively. The company decided to take advantage of the current high liquidity in the market combined with low interest rates to raise funds to pay down part of its expensive short-term debt. The debt was accrued following acquisitions over the past 18 months. Argos, which controls around 51% of the domestic cement market, is a subsidiary of Colombia’s largest conglomerate, Medellín-based GEA.