Washington DC, May 28, 2002The International
Finance Corporation (IFC), the private sector arm of the World Bank Group,
announced today a US$100 million investment in Suramericana Group (Suramericana)
in Colombia, one of the most important groups in the country’s finance
and insurance sectors. The investment represents one of the most comprehensive
projects ever undertaken by IFC in Latin America.
This investment involves corporate financing and advisory elements in support
of Suramericana’s medium-term strategy, which includes the formation of
strategic partnerships in key operating subsidiaries; preparation of individual
companies for public offerings of shares; and divestment of non-core shareholdings.
IFC will make a series of debt and equity investments in Suramericana Group
companies and it will advise Suramericana on key elements of its operational
and financial strategy. IFC will also assist Suramericana in the development
and adoption of corporate governance practices that will set new
standards in Colombia with respect to transparency and disclosure, treatment
of minority shareholders, and the operations and accountability of its
boards of directors.
“This deal fits well with IFC’s strategy to support the private sector
in Colombia, which has been key to the economic advancement of the country.
The Colombian private sector is reinventing itself, and IFC wants to support
this process”, said Bernard Pasquier, IFC’s Director of the Latin
America and Caribbean Department.
Mr. Paolo Martelli, IFC’s Regional Representative for the Andean region
added “These types of projects are critical for the modernization of the
Colombian economy. IFC expects to be able to provide similar support
to other Colombian private sector groups in the near future.”
Nicanor Restrepo, President of Suramericana de Inversiones, stressed the
enormous importance of this new relationship between IFC and the Suramericana
Group at the holding level, as well as with Colombia, especially in these
decisive times. He noted that IFC has been a shareholder for several years
of Corfinsura, an affiliate of Suramericana. Mr. Restrepo added: “The
resources approved by IFC to Suramericana, which include a long-term loan
with an exchangeable component and an equity investment, constitute an
excellent support to Suramericana's reorganization plan of its investments
and debt management. IFC’s financing is also a vote of confidence in the
private sector of Colombia and the Andean region.”
For IFC, this investment will also help demonstrate the benefits of improved
corporate governance practices and transparency and it will support the
Colombian government’s efforts in this area. This, together with the anticipated
public offerings of shares by Suramericana companies, will help to stem
the recent decline in trading volumes experienced by the country’s
Suramericana is affiliated with Grupo Empresarial Antioqueño (GEA), which
includes three Medellin-based groups incorporating major companies in the
cement, food, and financial services sector. GEA is one of the leading
economic groups in Colombia, employing over 80,000 people and accounting
for about 27 percent of Colombia’s stock market capitalization.
IFC’s current portfolio in Colombia accounts for $123 million. Since its
first approval in 1959, IFC has financed more than 80 projects in Colombia.
IFC’s strategic priorities include financial markets; infrastructure;
manufacturing and services and mining. Currently, IFC is focusing in strengthening
capital markets and facilitating access to capital for small and medium
enterprises, as well as assisting in housing finance by helping develop
a secondary mortgage market.
IFC has also been working closely with the Colombian government and the
private sector to improve securities regulations and to develop private
sector corporate governance codes.
IFC's mission (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people's lives. IFC finances private
sector investments in the developing world, mobilizes capital in the international
financial markets, and provides technical assistance and advice to governments
Since its founding in 1956 through the close of the last fiscal year on
June 30, 2001, IFC committed more than $31 billion of its own funds and
arranged $20 billion in syndications for 2,636 companies in 140 developing
countries. IFC's committed portfolio at the end of FY01 was $14.3 billion.