ING Sells Mexican Insurer
Grupo Financiero BBVA-Bancomer, Mexico’s largest financial group, bought out ING Groep’s stakes in three financial services companies for $693 million. ING, the largest financial services company in the Netherlands, sold the minority stakes that its Aetna Inc. subsidiary. ING acquired Aetna’s US parent in July, which already owned an insurance company and a pension fund in Mexico.
BBVA-Bancomer now has full ownership of three of its fastest-growing businesses: Seguros Bancomer, an insurer, Afore Bancomer, a private pension fund manager and Pensiones Bancomer, an annuity company. Afore Bancomer, has 23% of the pension fund market and is Mexico’s biggest private pension provider. Seguros Bancomer controls 34% of the insurance market. Pensiones Bancomer holds 23% of the annuity market. The Bancomer ING transaction must now await approval from government regulators who are expected to clear the deal by the end of the year.
Colombian Power Company Sale Blocked
Colombia’s top court suspended the privatization of power company Isagen until the Council of State can decide whether Empresas Públicas de Medellín (EPM) may participate in the bidding. The government hoped to raise at least $340 million by selling its 77% stake in Isagen this quarter, but the court order may seriously delay sale plans. The court ordered the council, a separate legal panel that oversees state agencies, to decide whether EPM’s right to equality had been violated by the government earlier this year when it prohibited the company from taking part in the sale. Later, the national energy regulator allowed EPM to participate in the privatization if it bid with a foreign partner and didn’t take a majority in Isagen. EPM planned to bid with Enron of the US.
Pérez Companc to Invest in Venezuela
Buenos Aires-based Pérez Companc, Latin America’s largest independent energy group, plans to invest up to $2 billion in Venezuela over the next five years. Pérez, which already pumps oil from four fields in Venezuela on behalf of state-owned Petróleos de Venezuela (PDVSA), hopes to triple its production there. Miguel Bibbo, managing director of Pérez Companc’s Venezuelan subsidiary, said it intends to raise output to 180,000 barrels per day by 2005, from 60,000 bpd now. Pérez operates in Venezuela with partners that include Williams Cos. and Anadarko Petroleum Corp.
Several local and international field operators are looking for new partners to share investment costs. However, Hector Ciavaldini, PDVSA’s president, has said he wants to renegotiate terms of its 32 operating contracts, including those it has with Pérez Companc. PDVSA pays the Argentine company a fee on every barrel it produces, but Ciavaldini says the contracts are becoming too expensive. Pérez Companc is negotiating a contract with PDVSA to explore and possibly produce natural gas in Venezuela’s San Carlos tract. Pérez won rights to San Carlos in an auction four years ago and found gas rather than oil. The region is close to other potentially large gasfields to be auctioned later this year. Pérez, which produces electricity in Argentina, is one of seven companies shortlisted to bid for the state power company serving Zulia, the oil-rich western state. Pérez may also make a bid for CA Energía Eléctrica de Venezuela, (Enelven), which may go on the block in November.
$1 billion for Venezuelan Refinery
Oil refiner Petrolera Ameriven awarded a $1 billion contract to a group comprised of Fluor Daniels, Tecnofluor and Venezuela’s Inelectra Proyectos to build a refinery servicing the Hamaca oilfield in southeastern Venezuela. Fluor Corp. is the leading US provider of construction and engineering services to the oil industry. A second contract for production facilities, worth about $100 million, was given to Inepar, which includes Inelectra and the US-based Parsons Corp. Heavy crude oil from Hamaca will be piped to the new refinery, to be located in Anzoategui’s José complex. The lighter-grade crude will then be shipped to US refineries for further processing.
Oklahoma-based Phillips Petroleum owns 40% of Petrolera Ameriven, while government-controlled Petróleos de Venezuela and New York’s Texaco each hold 30%. The group plans to invest a total of $3.8 billion in the project over the next five years, hoping to extract and refine about 190,000 barrels of heavy crude a day by 2004. Financing for the Hamaca project will consist of bonds and syndicated loans, according to Texaco.
WTO Approves Sanctions Against Brazil
The World Trade Organization granted Canada authorization to impose up to $2.1 billion in trade sanctions against Brazilian products over the next six years, ruling in favor of Canada in a dispute over airplane export subsidies. Canada is seeking compensation for sales lost by Montreal-based Bombardier to Brazil’s Embraer. The WTO ruled against Brazil’s Proex program, which offered loans at deeply discounted interest rates to buyers of Embraer’s commuter jets.
Banamex Accesses Asian Market
Standard Chartered Bank co-led with Bank of Tokyo-Mitsubishi a $130 million transferable term-loan facility for Banamex. This transaction makes Banamex the first Mexican bank to access the Asian debt market and opens the Asian credit market for Latin American non-sovereign borrowers. The structuring agents for the transaction were Bank of Taiwan and China Trust Commercial Bank. In total, 16 banks from six countries participated, half of which represent new business relations for Banamex.
Regulators Seize Bank
Banking regulators in Peru seized Banco Serbanco in September, declaring the small retail bank insolvent after shareholders failed to raise the necessary funds to cover losses. After deductions for bad-loan provisions and overdue interest payments on refinanced loans, the bank had negative net worth of $5.6 million. Its owners, the Chilean financial group Cruz Blanca, decided to let the bank close rather than inject further capital.