Transatlantic Aviation Limited (TAA) of the UK has bought a 50% stake in troubled Bolivian flagship airline Lloyd Aéreo Boliviano (LAB). The investment plan includes the immediate use of two aircraft to allow LAB to restart its most lucrative routes – to Spain and the US. The shares sold to TAA were those belonging to former LAB president, Ernesto Asbún, currently on the run facing charges of financial mismanagement. He handed them over to LAB’s workers in July. They have been running the airline since then. Three-quarters of the airline’s fleet has been out of operation since the beginning of the year due to mounting debt.
Category: Regions
Posted inDaily Brief
Colombia Adds To Privatization List
Colombia has added power generator Corporación Eléctrica de la Costa Atlantica (Corelca) and minority stakes in two other generators to its privatization list. The funds raised from the sale of 99% of Barranquilla-based Corelca, slated to be sold at auction next June, will be used to finance infrastructure projects on the Caribbean coast, according to a speech by President Álvaro Uribe earlier in the week. The minority stakes to be sold are in Electrificadora del Quindio (EDEQ), and Central Hidroeléctrica de Caldas (CHEC). Colombia recently announced it is to package shares from the best of the state-run regional electricity companies into a holding company that will be partially privatized next year. President Álvaro Uribe, who was inaugurated for his second term in office on Monday, has pursued a vigorous program of privatization during his time as president.
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Mexico Inflation Slows
The rate of headline inflation in Mexico slowed last month to 3.1% from 3.2% in June, according to the central bank, Banco de México (Banxico). The CPI was up 0.28% in July compared with 0.09% in June. Core inflation, which strips out fresh food and energy, was up slightly to 3.3% in July from 3.2% in June, although month on month it fell to 0.28% from 0.33%. Inflation is being contained because healthy growth this year (around 4%) is being driven by external, not domestic demand, say economists.
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Mexico Sells $12 Billion Peso Bonds To Slash Foreign Debt
Mexico sold $12.4 billion worth of local-currency bonds yesterday, Thursday, and will use the money raised to prepay $9 billion of its $13.4 debt to the World Bank and the Inter-American Development Bank (IADB). The success of the sale underscores investor confidence in Mexico’s stability and in the likely accession in December of business-friendly Felipe Calderón as Mexico’s next president. The floating-rate federal development bonds (Bondes D) were issued by the Treasury and sold to investors via the Central Bank. The government accepted central bank bonds (Brems) as payment for the new paper. The government will use the $12.4 billion raised to buy some of the huge foreign currency reserves held by the Central Bank to pay down part of its foreign debt. Mexico has built up foreign currency reserves of around $78 billion mainly as a result of the high global oil prices. Mexico’s foreign debt-to-GDP ratio currently stands at 7%; following the early debt repayments this will fall to 5.4% and foreign debt as a percentage of total debt will fall from 35.2% to 27.3%.
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Cornejo New Head of Banco De La Nación, Peru
Enrique Cornejo has been named the new head of Peru’s state-owned Banco de la Nación by President Alan García to replace outgoing Kurt Burneo. Cornejo, an economist, was the chief architect of APRA’s economic plan in the lead-up to the last elections which saw the party’s Alan García victorious.
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India Eyes Colombian Oil Concern
ONGC Videsh (the overseas investment arm of India’s state-owned Oil and Natural Gas Corp) has said it may bid for a stake in Omimex Colombia, owned by US oil company Omimex Resources. The Indian company is expected to bid together with China’s National Petroleum Corporation (CNPC). In June Omimex announced it would invest a further $70 million in its Colombian operations, looking to diversify from extraction of crude towards natural gas exploration and other alternative sources of energy.
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Mexico Begins Limited Recount
Mexican electoral authorities have begun the limited recount of votes from the July 2 elections. Ballot papers from 9% of the country’s polling stations are being reviewed in the recount. Protests staged by supporters of leftist candidate Andrés Manuel Lopez Obrador (AMLO) continue in the capital, Mexico City, with several banks the target of demonstrators yesterday, Wednesday.
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Millicom And Digicel Battle It Out For OLA
Luxembourg-based Millicom and Caribbean-based Digicel Group are the only two bidders remaining for Colombia Móvil, known as OLA, the country’s third-largest mobile phone company, after Chilean telco Entel withdrew from the race. OLA has again delayed the deadline for deciding a strategic partner, this time until August 31. The company is due to sell 50% plus one share of its capital to an investor in return for an injection of capital. OLA is owned by Colombia’s two largest telcos – Empresa de Telecomunicaciones de Bogotá (ETB) and Empresas Públicas de Medellín (EPM).
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Carso Plans To Delist Sanborns
Mexican conglomerate Grupo Carso, owned by local billionaire Carlos Slim, is planning to delist its retail group Sanborns after buying the rest of the company’s stock. On Monday, Carso offered to buy the remaining 16% stake of its retail company Grupo Sanborns for $377 million. Carso offered to buy the shares at a price of $2.36 (26 pesos) a share. According to analysts, the share acquisition by Carso is in response to shareholder concerns about the lack of liquidity of the company’s stock. Carso is planning to call a shareholder meeting to propose delisting Sanborns’ shares from the Mexican Stock Exchange.
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Exports Drive Mexican Auto Production
Meanwhile, external demand pushed up Mexican auto production last month, despite a fall in domestic demand. Output and exports rose sharply, with year on year growth of 21.3% and 32.4% respectively. The country’s largest manufacturing subsector has been experiencing a boom this year helping to drive economic growth.