Mexico’s government opened bidding yesterday for the contract to build the $4bn+ port at Punta Colonet in Baja California. The government says the massive project should be ready to start construction next year for completion in 2012. Some analysts say it could be worth as much as $7bn. The West Coast facility – Latin America’s first greenfield port – is the biggest in Felipe Calderon’s infrastructure plan and should divert container traffic away from the congested US ports of Long Beach and Los Angeles, through a planned rail connection to the US. Official bidding documents are set to be made available Tuesday, according to Mexican press reports citing transport secretary Luis Tellez. The world’s leading infrastructure names are expected to participate. Carlos Slim’s Ideal has formed a consortium with Grupo Ferromex and cargo terminal operator MTC Holdings. Other expected names include ICA, Hutchison Port Holdings, SSA Marine and DP World, as well as rail groups Union Pacific and BNSF. Financing the build will be a great challenge for the winner, as there is no real precedent, the complexities of integrating large port and rail operations are not well understood, and the Panama Canal expansion and other maritime projects in the region compete for investor attention.
Category: Regions
Parque Arauco Appoints Colombia GM
Chilean shopping mall developer Parque Arauco has appointed Juan Pablo Romero general manager of Inversiones Colombianas Arauco, its Colombian subsidiary. Romero previously worked at Colombian airline Avianca where he was responsible for the financial reorganization and sale of the company and managed strategic projects. Operations in Colombia are part of Parque Arauco’s $1bn expansion strategy for the period between 2007-2009, which encompasses investments in Chile, Colombia and Peru, the company adds.
Compartamos OKs Share Buyback
Shareholders of Mexican microfinancier Banco Compartamos shareholders have approved the creation of a MXP700m share buyback fund. The bank plans to use retained earnings to fund the repurchase of shares over an unlimited time period.
BBVA Colombia Sells $160m Bonds
BBVA Colombia has sold COP302bn ($160m) in bonds. The sale to local investors saw COP423bn in demand, the bank says, but it had filed to be able to sell up to COP500bn if demand was sufficient. It priced COP131bn in 2010 notes at the DTF inflation rate plus 2.35%, COP32bn in 2011s at DTF plus 2.55%, COP37bn in 2013s at DTF plus 2.69%, and COP102bn in 2013s at IPC plus 6.20%. Proceeds will go to working capital. BBVA’s capital markets unit managed the sale.
Voto Increases Milpo Stake
The Peruvian unit of Votoratim Metais has bought a roughly 8% stake in purchased miner Milpo for just over $200m. The purchase of 74.8m shares of miner Milpo at average of 7.72 soles per unit was done August 5-20, Milpo says. The stock rose from PES6.70 to PES7.40 during that period. The Brazilian conglomerate has long had its eye on the producer of zinc, iron and copper. In April, Votorantim made an offer to boost its then 25% piece in Milpo to a controlling stake. The $3.33 per share offer, raised from a $2.87 offer in March, was rejected on the grounds that it undervalued Milpo.
Cemex to Hit Local Debt Market
Cemex plans to sell up to MXP2bn in 2010 floating-rate notes in the Mexican market, it said in a filing. The AA+ transaction through HSBC is expected in September, and proceeds will repay short-term debt. The sale would be the tenth from a MXP30bn shelf, and follow an April MXP1bn 2010 bond priced at TIIE plus 36bp via ING and Santander.
MercadoLibre Bags DeRemate
Internet trading site MercadoLibre has agreed to purchase the operations of rival DeRemate in Argentina, Chile, Colombia and Mexico for $40m. Under the terms of the agreement, MercadoLibre will acquire DeRemate for $22m in cash and issue a promissory note to DeRemate for the remaining $18m, MercadoLibre says. “The combination of marketplaces would mean greater product offerings, increased liquidity and additional buyers and sellers on our websites,” the company says.
Televisa Convert Lifts Cablemas
S&P has upgraded Mexican cable TV operator Cablemas to BB (stable) from BB minus after conversion by Grupo Televisa of long-term convertible notes into 99.99% of the equity of Alvafig. The latter holds 49% of Cablemas’ voting equity. Televisa has further purchased an additional $100m in long-term notes issued by Alvafig, after which it holds a 49% voting equity stake in Cablemas and 54.6% of Cablemas’ capital stock, says S&P. It adds that Cablemas is a strategic asset for Televisa and will expand its cable services coverage.
S&P Downgrades Empresa Electrica de Guatemala
S&P has cut its corporate credit rating on Empresa Electrica de Guatemala (EEGSA) to BB minus from BB and placed it on credit watch with negative implications. The downgrade comes after the national energy commission in Guatemala lowered by 55% a component of the 2008-2013 tariff that reimburses the distribution company for its investment, S&P says. “This change will result in deteriorated profitability and cashflow measures as well as limited liquidity during the second half of 2008 and going forward,” the agency says. Any downward rating action would not necessarily be limited to one notch, it adds. The rating is constrained by inherent challenges associated with the operating environment of Guatemala, as well as limited financial flexibility, given undeveloped local capital markets.
Singapore Diversifies Into LatAm
Temasek Holdings, the Singapore sovereign wealth fund, says it could invest more in LatAm, after making record profit in the last financial year. “While Temasek’s primary focus remains in Asia, it is open to deepening and broadening its exposure to other markets such as Russia and Latin America through funds and direct investments,” says the investor. Temasek is heard seeking to invest significant new funds in LatAm. In the financial year ended March 31, Temasek achieved record profit of S$18bn ($12.6bn) owing to strong operating performance at its portfolio companies and healthy realized gains from direct investment. Its portfolio grew to S$185bn, an increase of 13% year-on-year. For the first time ever, Temasek says its net investment outside Asia (S$10bn) exceeded net investments in Asia (S$5bn). In the preceding five years, Temasek had invested a net S$26bn in Asia and just under S$1 billion net in non-Asian economies. “Temasek’s underlying asset exposure to economies outside Asia increased from 22% of its portfolio to 26%, bolstered by investments such as Merrill Lynch in USA and investments in Latin America and Russia,” says the fund. Investment since 2002, when Temasek raised exposure to EM Asia, have delivered a 6-year annualized return of 32%, compared to 16% delivered by the rest of the portfolio. Financial services, telecommunications and media account for the bulk of Temasek’s portfolio. “These two sectors are good proxies for exposure to the potential presented by transforming economies and a growing middle class,” says Temasek. “The fallout of the credit crisis will continue to dampen the global economy over the next 24 months, with sharply escalated oil and food prices beginning to test inflation expectations,” says Temasek chairman S Dhanabalan.