Latin Finance - July 2008 - (Page 23)

colombia investment banking Colombian Companies Targeted Brewery purchase tops list by size Acquirer SABMiller Xstrata Cepsa Telefónica China Petrochemical Corp. ING Groep Glencore Intl AIG/Covinoc/Cargill/IFC Source: Dealogic Target Bavaria Cerrejón mine Caracara Colombia Telecom (50%) Orimex (50%) Cesanta / AFP Cartagena refinery (51%) Central de Inversiones (NPL portfolio) Value $m 6,677 1,700 900 862 850 650 631 596 Country of origin UK Switzerland Spain Spain China Netherlands Switzerland US Sector Food and beverages Mining Oil and gas Telecom Petrochemical Insurance Oil and gas Finance Closing Dec-2005 May-2006 Mar-2008 Sep-2006 Aug-2006 Jan-2008 Aug-2006 Jun-2007 Colombia Shops Around Americas Bancolombia's CentAm acquisition biggest so far Acquirer Bancolombia Interconexión Eléctrica ISA Cementos Argos Interconexión Eléctrica ISA Organización Terpel Cementos Argos Nacional de Chocolates; Florida Ice Source: Dealogic Target Banagricola CTEEP (21%) Ready Mixed Concrete CTEEP (16.46%) Repsol-YPF (210 gas stations) Southern Star Concrete Riviana Pozuelo;Alimentos Kernis Value $m 789 525 435 349 250 245 205 Country of Target El Salvador Brazil US Brazil Chile US Costa Rica Sector Finance Utility and energy Construction/building Utility and energy Oil and gas Construction/building Food and beverages Closing May-2007 Jul-2006 Mar-2006 Jan-2007 Dec-2007 Nov-2005 Feb-2007 2005. The same happened with Megabanco when it was acquired by Banco de Bogotá, and Colpatria, which was bought by GE. The development of equity markets is also curtailed by a legal framework that prohibits the purchase of shares with credit. “This generates difficulties,” Isaza says. “Structures like leveraged buyouts are still sophisticated for this market,” he adds. But at the same time, Colombia has seen very successful IPOs such as Ecopetrol, and Isagen. And in June, Agora served as bookrunner for the sale of a 12.11% stake in Colombia’s Banco Popular by the district of Bogotá and the Colombian federal government on the Bogotá exchange. Locals with the Edge International investment banks are aggressively seeking opportunity to diversify their regional fee pools. More mature markets like Mexico and Brazil have become crowded, leaving many seeking the next growth story, particularly in Peru and Colombia. Local boutique investment banks will have a problem competing with the foreign invasion when it comes to jumbo transactions that require hefty balance sheet deployment or global distribution. But they claim an edge when it comes to smaller clients, which should be a growth area. “We have experienced people that can bring more personalized contact with the client and do not delegate case by case,” Ricaurte Junguito says. Knowledge of the idiosyncrasies of local business is also an advantage. “Boutiques are very versatile and can adapt services to each case,” says Rodríguez Díaz. The surge of SME business has prompted the creation of investment banks focused completely on this sector. Capitalia Colombia, a subsidiary of Crea Me, the company incubator in Medellín, offers investment banking services to such companies. “We act as a network of financial services for the creation of new companies and for consolidating existing companies with growth potential,” says Jorge Montoya, director at Capitalia. “We do things that others cannot do, like debt and equity in domestic markets, because we have a presence and knowledge,” says Gustavo Ramírez, vice president of investment banking for Colombian financial holding Corficolombiana. “A foreign bank can’t do that if it doesn’t have a local operation,” he adds. LF UPDATE For an exclusive Mexico investment banking outlook see www.latinfinance.com > July/August 2008 LATINFINANCE 23 http://www.latinfinance.com

Table of Contents Feed for the Digital Edition of Latin Finance - July 2008

Latin Finance - July 2008 Contents Investment Banking Outlook Compensation Survey Colombia Investment Banking Borrowers vs. Investors Banorte Profile Braskem Financing Strategy Brazil Hydro Finance Peru Port Privatization Panama Money Flows Argentina Local Markets Guide to Banking Technology Who Said That?

Latin Finance - July 2008

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