Latin Finance - September/October 2010 - 55

Andean colombia pension funds

This system, say executives, has made everyone much more efficient and profitable. Copeinca says its Ebidta is 30%-40% more than under the previous regulations. As a result of these improvements, explains Luis Abram, director of finance at Pesquera Diamante, Peru’s third-largest producer, asset prices did not suffer much during the crisis. They are not at as attractive levels as they might be in other industries stung by the downturn. “We don’t rule out continuing with acquisitions if the market is there,” Abram says. “Quotas have revalued the market, but it is always a good time to look, especially considering continued strong growth prospects.” Abram and other executives expect Diamante had planned an IPO, but settled for a private placement instead fundamentals to remain firm. Fishmeal prices regained record levels at year-end 2009, of $1,800 per metric ton, according to Copeinca, boosted Rossana Ortiz, CEO of Pesquera Exalmar, says her firm is eyeing by demand from the Omega-3 market. There is always the risk of both organic growth and acquisition in the near term. slippage in China growth, but Abram says demand has kept up. She explains that while the firm does not plan to raise debt in He does not anticipate a fall in demand over the next few years. the near future, it was preparing a sizeable financing transaction Chinese fish companies appear to be bullish. China Fisheries that was expected to come as soon as August. was willing to pay post-ITQ prices, splashing $95 million in May Elsewhere, Diamante had planned an IPO before the crisis, but for the parent of Pesquera Alejandría. China Fisheries, now the settled for an $85 million private placement in November. Bankers number seven producer in Peru, also demonstrates how investors are meanwhile pitching Pesquera Hayduk with a syndicated loan are flocking to the sector, selling a 13.6% to fund organic expansion. stake in itself to Carlyle Group for $190 The challenge for Peru’s fisheries million in June. raising funds internationally is the same one facing Andean corporates across Deals Upstream? many sectors. Debt investors hungry to Copeinca became the first of Peru’s diversify away from Mexico and Brazil fisheries to tap international bond have provided heavy demand in the past investors, selling a well-received $175 year for dollar bonds from the likes of million 2017 bond in February to yield Ecopetrol, Pacific Rubiales and Copeinca. 9.12%. The BB minus bond widened out While more supply from Peru and to yield 9.36% by mid-July, according Colombia would likely be well-received, to Credit Suisse, which was joint lead at the moment, few companies are able to with Santander. Castro Mendivil says issue at the size required. Copeinca has $70 million to spend on “You need to see more scale from organic growth in the next two years, issuers,” says Augusto Urmeneta, head mostly funded by proceeds from the of LatAm capital markets at Bank of bond. He says the company views local America Merrill Lynch. He adds that markets as attractive, but could not quite smaller issues would stick to local offer the volume required. markets in Colombia and Peru, where “From the point of view of rates are generally attractive. An acquisitions, we’re going to see a lot of expected uptick in Andean M&A should flexibility for the companies to attain help drive issuers cross-border, and their goals,” says Alonso Molina, head of Americas DCM at bankers say funds are available. BBVA, referring to the resources available in the Andes for M&A. “Latin American issuers, and specifically Peruvian issuers, Bankers expect consolidation across several sectors in Peru and have good access to capital,” says Ortiz. “In the past year-and-aColombia, though this has yet to translate into sizeable DCM flow. half, the businesses and the financial systems have shown great More public fundraising appears to be on the horizon. resistance to the international impact of the crisis.” LF

“You need to see more scale from issuers,” says Augusto Urmeneta, head of LatAm capital markets at BAML. “Smaller issues would stick to local markets in Colombia and Peru, where rates are generally attractive.”

September/October 2010

LatinFinance 55

Latin Finance - September/October 2010

Table of Contents for the Digital Edition of Latin Finance - September/October 2010