Former president of Peru, Alan García, says he is confident that he will beat off rival Lourdes Flores to proceed to the second round of voting to elect Peru’s president. He will face the victor of the first round, nationalist Ollanta Humala, in a run-off slated for May 28 or June 4. García has said he will withdraw his complaints against voting carried out abroad in the US, Italy and Spain, such is his confidence in his victory. However, with 89.5% of the votes counted, the difference in votes between the two second-round contenders had narrowed to just a little over 95,000 votes. Humala had garnered 30.90%; García 24.38% and Flores 23.53%.
Category: Regions
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Ecopetrol Seeks Pension Fund Administrator
Colombian state-owned oil company Ecopetrol has announced that it is likely to be accepting bids from companies to run its pension fund, worth $3.8 billion, in June. The bidders will have to guarantee a return for the fund on a par with inflation plus six percentage points.
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IFC Approves Loan To Guatemalan Banco Industrial
The International Finance Corporation (IFC) has agreed a subordinated loan of $30 million to Guatemala’s largest financial institution, Banco Industrial, aimed at strengthening the capital base of the Bank. Atul Mehta, IFC’s director for Latin America and the Caribbean, said: “IFC’s investment will constitute a signal of approval in the international market and help put Banco Industrial on a very competitive footing as CAFTA is implemented in the region.” The move is part of a strategy to encourage the development of Guatemala’s banking sector as a whole. The loan will help Banco Industrial expand its financing of local companies, as well as the country’s growing export sector. IFC is the private sector arm of the World Bank.
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García Extends Lead Over Flores; Markets Wobble
The markets in Peru took a dive yesterday, Tuesday, as it became increasingly clear that former president Alan García would be the most likely candidate to face nationalist Ollanta Humala in a second round of voting for Peru’s next president. With almost 85% of the votes counted, Humala had garnered 30.8%, García 24.7% and Flores 23.6%. Throughout the election campaign, market-friendly conservative Lourdes Flores had been the favorite to battle it out with Humala in a run-off but it looks as if García’s platform of spending succeeded in attracting a larger number of the country’s 25% of swing voters, in particular the younger voters who remember little of García’s previous period in charge. García was president of Peru between 1985 and 1990; by the time he left office, the country was suffering from hyperinflation and rebel insurgency. Interestingly, Flores was well ahead of her rivals in the votes cast abroad: she polled 62.2% against 8.5% for García and 8.0% for Humala.
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Gigante Offers $260 Million 10-Year Notes
Mexican retail group Gigante has made an offering of $260 million senior notes, maturing in 2016, to yield 8.75%. The offering is being arranged by ABN Amro. The funds raised are to be used to prepay existing debt and extend the company’s debt maturity profile. Gigante is Mexico’s fourth-largest retail chain, based on revenue. The notes were assigned a BB rating last month by Fitch Ratings.
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Innova Ups Buyback
Mexican satellite television operator Innova, controlled by Televisa, is to buy back all its senior 2013 notes in circulation in the market. Last month the company said it was to buy back $195 of the $300 million senior notes outstanding to help refinance its debt and reduce costs. Innova decided to increase the buyback after an overwhelming uptake from noteholders and extended the deadline to April 25. Innova will use a 10-year bank loan, guaranteed by Televisa, to fund the buyback.
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Mexico To Sell Airport Operator Via IPO
The Mexican government has rejected an offer by local construction firm ICA to buy the remaining 49% stake in airport operator Grupo Aeroportuario Centro Norte (GACN) for $270 million and will instead offer it for sale for $300 million via an IPO. ICA already owns 51% of the company and therefore had the right to bid for the outstanding shares. GACN has operations in 13 locations throughout the country, including Monterrey and the resort of Acapulco. In February the government raised $870 million from the sale of Grupo Aeroportuario del Pacifico (GAP), the country’s largest airport operator. The sale was the government’s largest IPO in 10 years.
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Attentions Focuses on Peru Run-off
Attention is focusing on the runners up in the presidential elections in Peru, after Sunday’s polling failed to produce a winning candidate with more than 50% of the vote. The second place in this tightly fought race ensures a place in the second-round run-off. As of late yesterday, Monday, with 76% of the votes counted, the leading candidate was nationalist Ollanta Humala polling 29.75%, followed by former president Alan García on 25% and conservative Lourdes Flores on 24.54%. The markets had widely foreseen a second-round battle between Humala and Flores with Flores the victor. The run-off is slated for May 28 or June 4, according to government officials, allowing time for counting, recounting and challenges in such a close race. Meanwhile, voting for Congressional seats is also unlikely to return a clear majority, with Humala’s Unión por el Perú set to take 25 out of 120; García’s APRA likely to gain 24 and Flores’ Unidad Nacional 19 seats. The remaining seats will be shared between two, possibly three other parties.
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Bidders Line Up For Ecopetrol Project
Meanwhile, eight bidders have qualified to bid for the license to explore and develop 1.7 million hectares in the Colombian province of Meta for unproven oil reserves of around 3 billion barrels together with state-owned oil firm Ecopetrol. The government is looking for investment commitment of around $1.6 billion that it estimates will increase daily production from its current level of 60,000 barrels of crude up to 200,000 barrels. Bidders include Exxon Mobil and Chevron of the US, France’s Total, Brazilian Petrobras, BP of the UK, Russian Lukoil, Spain’s Repsol YPF and China Petroleum and Chemical Corp.
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Telefónica Outbids CANTV For Colombia Telecom
Spain’s Telefónica has beaten off rival bidder CANTV of Venezuela to win control of Colombia Telecom for $369 million. Telefónica outbid its Venezuelan rival by $17 million to buy 50% plus one share of Colombia’s largest state-owned telephone company, exceeding government expectations of a $350 million sale price. 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. The sale has thwarted attempts by Mexican entrepreneur Carlos Slim to gain a foothold in Colombia’s telecoms market. Last year a bid by his Telmex of $350 million was rejected by the government as too low. Two weeks ago he bought 29% of CANTV in what was seen as a move to secure control of the Colombian provider. Citicorp advised the government on the privatization.