Category: Colombia

French supermarket giant Carrefour has said it may be interested in buying Colombia’s retail chain Carulla Vivero, the second-largest in the country. Several weeks ago Carulla Vivero mandated Credit Suisse to search for a strategic partner for it. There has been much speculation in recent months about the possible sale of Carulla Vivero, with possible suitors including Chilean retailers Ripley, Cencosud and Falabella or even US behemoth Wal-Mart. The Colombian retailer, which is controlled by US investment fund Newbridge Andean Partners, last year entered a joint venture with Ripley to launch a co-branded credit card.

Chilean investors favored Peru and Colombia as their top destinations in the region in the first half of the year, according to the Santiago Chamber of Commerce. Peru, the top destination attracted $270 million worth of investment, representing 27% of the total. Colombia captured $230 million of the $1.1 billion total invested in the region, followed by Brazil which ended up with 18% or $150 million. Neighboring Argentina, which has traditionally attracted large amounts of Chilean money, pulled in only $99 million, a dramatic fall from last year’s figure of $166 million. Most of Chile’s outward investment went into the energy and retail sectors. Overall, Chile invested $4 billion outside the country during this period, with most going to the US.

Colombia’s inflation in July rose by 0.41%, month on month, according to government figures. This compares with a price rise of 0.05% for the same month last year. Consumer prices were driven up by the 1.06% increased costs in transport and communications. Food prices rose 0.52%. Cumulative inflation for the year is running at 3.44%, slightly down on last year’s rate of 3.98% as at the same period. Inflation for the 12 months through July stood at 4.32%, compared with 4.91% for the same period last year.

The bidding for the concession to run two airports on Colombia’s Caribbean islands of San Andrés and Providencia are due to close today, August 3. Six groups of companies have bought the bidding documents: Corporación América, Estudios Técnicos Universal, Odinsa, Ramón Pereira Visbal, Stratis and Valores y Construcciones. The concession contract is set to be for 20 years and foresees investment of around $19 million in the first few years. Last month, five groups of companies presented bids for the concession to run the Bogotá’s El Dorado international airport. These included three of the companies hoping to bid for the Caribbean airports: Corporación América, Stratis, and Odinsa. The concession for El Dorado is due to be awarded by the end of this month.

Colombia’s government says it is ready to privatize 20% of power generator Isagen as soon as market conditions allow. The government is hoping to raise $123 million from the sale. The company recently succeeded in swapping a large part of its US dollar debt for local-currency debt, thereby reducing its exposure to exchange-rate fluctuations. The government is hoping to emulate the path taken by state-controlled electricity distributor Interconexión Eléctrica SA (ISA), which was partially privatized in 2000 and which has become a key regional player in the sector, expanding into Panama, Peru, Ecuador, Bolivia and Brazil.

Colombia Móvil, known as OLA, the country’s third-largest mobile phone company, has delayed the deadline for deciding a strategic partner from August 3 to August 11. The company is due to sell 50% plus one share of its capital to an investor in return for an injection of capital. OLA, owned by Colombia’s two largest telcos – Empresa de Telecomunicaciones de Bogotá (ETB) and Empresas Públicas de Medellín (EPM) will pick from three companies that pre-qualified: Luxembourg-based Millicom, Caribbean-based Digicel Group and Chile’s Entel.

The Colombian pension funds that last month bought control of the country’s largest gas distribution company, state-owned Empresa Colombiana de Gas (Ecogas), have said they may step in the buy the 20% stake of state-run Ecopetrol the government is looking to sell. The six pension funds (AFPs) paid $300 million for Ecogas, marking the first foray by the funds into the gas sector. Under Colombian privatization law, state companies to be sold must first be offered to the “solidarity” sector comprising pension funds, cooperatives and unions.

Citigroup has bought an additional 20% stake in Colombian pension fund manager Colfondos from local financial entity Cafam to take 100% control of the company. Citigroup made the acquisition via its subsidiary Yonder Investment. This follows the purchase six years ago of a 35% stake from Spain’s BBVA. Colfondos was the country’s fourth-largest pension fund (AFP) as at end-April.

Lower-than-expected inflation prompted Colombia’s Central Bank to hold its benchmark interest rate unchanged at 6.5%. Inflation fell in the 12 months through June to 3.94%, the lowest level in 40 years and below the 4%-5% Bank target. Last month the Bank raised the overnight benchmark rate a quarter of a percentage point to its current 10-month high.

Colombia’s government has finally confirmed its plans to sell off 20% of the country’s largest company, oil concern Ecopetrol. In accordance with national privatization law, the stake will first be offered to the “solidarity” public sector comprising: unions, workers pension funds, and cooperatives. The sale of all or at least part of the company has often been a topic of discussion over the past few years, during which Alvaro Uribe’s government has pursued a vigorous program of privatization.