The Colombian government will set the sale date for the 50 percent plus one share of the state-owned telecom company, Colombia Telecom, for April 7. Citicorp is advising the government on the sale and it expects to receive approximately $350 million from the privatization. Spain’s Telefonica, Mexico’s Telmex and Venezuela’s CANTV are all expected to bid. The government is holding on to almost half the company to ensure the privatization does not lead to the creation of a private quasi monopoly as it did in many Latin American countries, most notably Mexico.
Category: Regions
Posted inDaily Brief
Bantismo Says HSBC Not Buying
Central America’s largest banking group, Panama-based Grupo Banistmo, has denied rumors that it is to be bought by UK bank HSBC. Banistmo was commenting on local newspaper reports that a sale was imminent. In February, Banistmo bought a 53.7% stake in El Salvador’s Inversiones Financieras Bancosal. And it is planning to enter the Guatemalan market by 2007. HSBC meanwhile has been on something of a spending spree in Latin America. Earlier this year, it agreed to buy the Argentine unit of Italy’s BNL for $155 million and the Paraguayan assets of Lloyds TSB for $15 million. It has also made an application to set up operations in Peru.
Posted inDaily Brief
Cemex Plans Dubai Plant
Mexican cement producer, Cemex, has announced it is to invest $50 million in building a new grinding facility in Dubai, UAE, to meet growing local demand for its product. Construction is due to be completed in 2007, taking production capacity in the region to 1.6 million metric tonnes. The money to be invested is part of $500 million allocated by the company this year towards its worldwide capital expansion program. Cemex began operations in UAE last March when it acquired British RMC Group. Its operations there focus on ready-mix concrete production and ground slag supply to the booming local construction industry.
Posted inDaily Brief
Bimbo Expands Into China
Mexican food firm Grupo Bimbo is to buy a 98% stake in Beijing Panrico Food Processing Center, the Chinese subsidiary of Spanish baker Panrico, for $11.1 million. The acquisition, which should be completed in the next three months, will give Bimbo access to the markets in Beijing and Tianjin and be a first step into China’s huge consumer market. Bimbo is also planning to acquire plants in Colombia, Chile, Uruguay and Guatemala this year, investing around $300 million.
Posted inDaily Brief
Mexican Economy Riding High
Figures released by the government show that Mexico’s economy expanded by 5.7% year-on-year in January, the highest growth rate since November 2000. Growth was driven fairly evenly by the agriculture, industry and services sectors, which rose 8.5%, 6.0% and 5.6% respectively.
Posted inDaily Brief
Banxico Cuts Rate
Mexico’s central bank, Banxico, has cut the benchmark overnight lending rate from 7.50% to 7.25%, bringing it to an 18-month low. The market broadly expects the rate to drop to 7% by the end of the year, although economists have differed in their interpretations of Banxico’s latest statements regarding future cuts. Some believe the central bank will adopt a more aggressive stance and take the rate down to 6.75% by year-end.
Posted inDaily Brief
Mexico Warrants Success
Mexico has successfully concluded its latest warrants issue, exchanging $722 million worth of euro-denominated bonds (€600 million) into local-currency bonds. The strategy of issuing warrants is aimed at reducing the country’s vulnerability to external market risk. The new peso-denominated M Bonds carry 8% interest and mature in 2013 and 2023. In November, Mexico became the first developing nation to attract investment into its local debt market when it raised $69 million by offering to swap up to $2.5 billion of dollar-denominated debt into peso bonds. The deal was led by Credit Suisse and Goldman Sachs.
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Ecuador Declares State Of Emergency
Ecuador’s president, Alfredo Palacio, declared a state of emergency in five central provinces on Tuesday, and ordered the army in to restore order. Demonstrators have been blockading roads since last week in protest against the proposed free trade agreement with the US. The blockades have caused shortages in some areas and a loss in trade revenue for the country.
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Repsol YPF Bolivia Head Resigns
The head of Repsol YPF in Bolivia, Julio Gavito, has resigned his position to dedicate time to defending himself against allegations of improper conduct. The Bolivian authorities in Santa Cruz, the province in which Andina – the Bolivian unit of Repsol YPF – is based, have accused the company of effectively smuggling $9.2 billion worth of crude oil out of Bolivia last year. Gavito’s replacement as country manager has been named as Luis García Sánchez, current manager of GLP Andina in Lima, Peru. The Spanish government has said it has concerns about how Bolivia has handled the investigation into Andina, adding that it is a “bad sign” for foreign investors.
Posted inDaily Brief
Bolivia To Nationalize By July
Bolivia’s president, Evo Morales, has promised that by July 12 this year “the Bolivian people will have their natural resources nationalized”. Morales’ pledge came at the inauguration of a national literacy program in Camiri in the eastern province of Santa Cruz. July 12 is the 71st anniversary of the founding of Camiri. Morales has long said that he intends to increase the share of the state in Bolivia’s natural resources although he has confirmed that this will not involve the confiscation of assets. The energy ministry is currently working on the details of a new decree overhauling the sector. Investors are keen to learn how Morales’ process of “nationalization” will unfold.