President-elect of Ecuador, Rafael Correa, is finalizing his team ahead of taking power on January 15. On Wednesday he announced the appointment of Guadalupe Larriva as minister of defense, the first time a civilian and a woman has been tapped for the post. Also named were Trajano Andrade as minister of transport and public works, Jorge Encalada as head of agriculture and Carolina Chang who is to head up the health ministry. Correa is keeping three ministers from the current Palacio administration: Raul Vallejo as education minister, Maria Isabel Salvador as tourism minister, and Anita Alban Mora as head of the environment. Correa has so far named 17 ministers, including his economy minister – Ricardo Patiño – and his energy chief, Alberto Acosta, as well as Maria Fernanda Espinosa as his foreign minister, who were appointed earlier this month.
Category: Regions
Ashmore Takes Control Of Promigas
International investment fund Ashmore, based in London, has taken control of Colombian natural gas distribution company Promigas after increasing its 33% stake to almost 43%. Ashmore, via its subsidiary AEI paid $160 million for a 9.9% stake owned by local financial entity Corficolombiana. In August Ashmore paid $350 million for a 33% share of the distributor after it acquired Prisma Energy, owners of the holding. Promigas is the largest private natural gas transmission company in the country and transports around 65% of natural gas in Colombia.
US Duke Energy May Sell Bolivia Stake
US utility company Duke Energy may be concluding an agreement soon to sell its Bolivian assets, which include a 50% stake in a hydroelectric dam. The Corani dam, situated near the country’s third-largest city Cochabamba, is also operated by the North Carolina-based company. Duke Energy filed a notice with the US Securities and Exchange Commission which stated that, based on talks with a potential buyer, it expected to record a pre-tax charge of around $50 million for the asset in the last quarter of this year.
Merrill Lynch: Ecuador Will Likely Miss February Coupon Payment
In a research note sent out at the end of last week, Merrill Lynch said it believed that Ecuador would likely miss the debt service payments in February on its Global ’30s notes. The analysis by the Bank followed further details offered by Ecuador about its debt restructuring plans. President Rafael Correa said his administration would present a package to creditors in February and that it would follow the lines of Argentina’s restructuring. “Taken together”, said Merrill Lynch, “these statements likely mean that Ecuador will miss its Global ’30s coupon payment in February, and will try to push debt maturities back and cut coupon payments.” The firm went on to say that it believes Ecuador will have a harder time than Argentina convincing investors to agree to short-term debt relief given the country’s ability to pay.
Bancolombia Buys Banagrícola
Colombia’s largest financial institution, Bancolombia, is grabbing a larger slice of the action in Central America after it agreed to acquire Salvadorian financial group Banagrícola. Bancolombia has agreed to buy at least 52.9% and up to 100% of the Group for between $460 million and $900 million in cash via its subsidiary Bancolombia Panamá. Banagrícola owns local bank Banco Agrícola, which has a 29% share of all deposits and loans in El Salvador, as well as the leading insurer – Asesuisa – which has a 23% domestic market share. The Group also owns pension fund AFP Crecer and brokerage company Bursabac. Bancolombia Panamá will make, simultaneously, public offerings in Panama and El Salvador for all the ordinary shares of Banagrícola at $47 per share. The offerings will be made as soon as the acquisition is approved by regulators. Bancolombia hopes to close the deal in the second quarter of 2007. UBS acted as financial advisor to Bancolombia.
IFC Boosts Peru MBS Market
The International Finance Corporation (IFC), the private-sector arm of the World Bank, is collaborating with Titulizadora Colombiana and Banco de Crédito del Perú to set up Peru’s first secondary mortgage market company, Titularizadora Peruana. The company, which will have an estimated capital of $3.6 million, “will acquire residential mortgage loans and structure mortgage-backed securities to develop the secondary mortgage market and expand access to housing finance in Peru”, said the Corporation. IFC has already approved a credit line of $50 million for Titulizadora Peruana to acquire a mortgage portfolio and improve the conditions of structured securities. The aim of IFC is to replicate the model of Titularizadora Colombiana and Hipotecaria Su Casita, two IFC-backed institutions, that have helped to develop the MBS markets in Colombia and Mexico, respectively.
Colombia Movil Plans IPO
Mobile phone operator Colombia Movil, acquired earlier this year by Luxembourg-based Millicom, is planning to sell 9.25 million shares in the local stock market, the company informed the country’s securities regulator. The company will issue preferred and non-voting preferred shares. The share price is due to be set next week.
Arcelor Mittal Buys Sicartsa For $1.4 Billion
Luxembourg-based steelmaker Arcelor Mittal has agreed to buy 100% of Sicartsa, a Mexican integrated steel producer, from Grupo Villacero in a deal worth $1.4 billion. Sicartsa has plants in Mexico and Texas. The deal will make Arcelor Mittal the largest steel-producer in Mexico. The two companies will also create a downstream strategic alliance. This is Arcelor Mittal’s first acquisition since the creation of the company earlier this year and it expects the acquisition to “generate $80 million of industrial synergies in addition to a further $50 million from commercial, procurement and selling, general & administrative synergies”. The deal is expected to close in the first quarter of next year.
Cementos Argos Closes $480 Million Syndicated Loan
Colombian cement producer Cementos Argos has closed a $480 million syndicated loan through Citigroup Global Markets and BNP Paribas Securities, after receiving commitments of up to $648 million, said the company. The loan takes advantage of the liquidity in the market and will be used to pay down debt. Cementos Argos is part of the country’s largest conglomerate – GEA.
US Freightliner Plans Mexico Plant
US truck manufacturer Freightliner, a unit of US automaker DaimlerChrysler, has announced it is to invest $300 million in building a second plant in Mexico, planned for Saltillo, Coahuila and due to be operational by 2009. The plant will produce commercial trucks as the company gears up for an increase in consumer demand. Meantime, Freightliner prepares to shed jobs in North America in its heavy truck production facilities.