Category: Regions

Colombian engineering and infrastructure development company Odinsa, through the Opain consortium it is leading, is evaluating proposals for the $400m project financing package it plans to raise for the buildout of the passenger and cargo terminals at Colombia’s El Dorado international airport, Mario Dib, the company’s VP of finance, tells LatinFinance. The 17-year financing will either be in the form of an A/B loan, or a private placement of structured bonds. Bancolombia and BNP are advising Odinsa, but the banks that will end up leading the financing are in no way limited to those two, says Dib. The company is evaluating the project’s needs and a decision on the nature of the financing is expected in the coming two months.

Colombia should give up capital controls, which haven’t worked yet and will further distort the economy if left in place, according to S&P. “If a measure is not successful in the short term, it’s better to abandon it,” says Victor Hererra, managing director at the ratings agency. Jane Eddy, S&P’s head of LatAm corporate and government ratings, adds that the measure could well be distorting, and also says that the appreciation of the peso may not be cyclical. They were speaking at a press conference in Bogotá. Bankers say the capital controls could also drive Colombian equity issuers offshore, including to the Brazilian market. Separately, S&P says it wants to see sustained solid growth, a better fiscal situation and lower debt before raising Colombia to investment grade. There are also concerns about political stability. The market expects an upgrade in 2008.

SABMiller, the global drinks producer, is reportedly considering taking a majority stake in Colombia’s Industria Licorera de Caldas (ILC). The state government is looking for a strategic partner for ILC and does not rule out selling more than 50%, according to reports in Colombia’s financial press, citing Caldas state governor Emilio Echeverri. Other multinationals are also heard looking at ILC and Echeverri is quoted saying that no deal has yet been signed. Colombian press reports that SABMiller officials have been visiting ILC facilities recently. The potential transaction comes at a time when Colombia is also looking at selling stakes in Ecopetrol, Isagen, ISA and other state liquor producers may go on the block if ILC is sold. ILC is famed in Colombia for its aguardiente and rum.

Bancolombia completed the local portion of its planned sale of up to $400m in preferred shares. The company, which is offering 60m shares, placed 21.3m of them locally at COP15,205, raising COP324bn, or $165m. Bancolombia’s investment banking arm sole-ran the deal. The bank will now turn to the ADS market, where it hopes to raise the remaining amount via UBS and Merrill Lynch. Bancolombia, which already has outstanding ADS in New York, is looking even out its balance sheet following a $400m sale of 2017 bonds in May.

Colombia’s ministry of finance has launched an investor relations group that will look to bolster the treasury’s and the government’s efforts to create an open channel with local and foreign holders of the country’s debt. IR Colombia, as it is called, is based on a similar model employed by Brazil, Mexico and Peru, Julio Torres, head of public credit, tells LatinFinance. “We admire very much Brazil’s BEST effort,” says Torres, referring to an initiative headed by a number of Brazil’s market participants including the BM&F, the ANBID, market regulators and public credit offices. The group will have a web site, to be launched in September, that will provide financial data on the country and a team that will answer questions. The initiative was launched at LatinFinance’s Andean Investment Forum, held in Bogotá Tuesday.

Ecopetrol, Colombia’s state-owned oil company, will on August 27 begin to offer its shares to the public in a process that will yield an estimated $2.5bn-$3.0bn in equity. The company is looking to sell up to a 20% stake through an equity offering, part of a larger process to privatize state-owned companies. “A 10% stake would be worth around $2bn or $2.25bn,” Javier Gutiérrez, CEO of Ecopetrol, told LatinFinance on the sidelines of The Andean Investment Forum in Bogotá Tuesday. The offering will take place in three rounds. The first will be offered to stakeholders with special rights, such as labor syndicates, employees and current owners. The second will go to general retail and institutional investors in Colombia, and the third will be offered abroad. Local demand for the securities is estimated at $600m-$900m, according to bankers. The remainder will be offered abroad. Citi and Merrill Lynch have been hired to value the company for the offering, while Credit Suisse and JPMorgan will underwrite the deal, with Bancolombia acting as the local underwriter.