Colombia: Equity issuance moves into a boom period

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Colombia: Equity issuance moves into a boom period

Two major state companies will be partly privatized and up to 10 private companies are expected to undertake initial public offerings in Colombia next year.

Some 20% of the equity of the country’s leading state oil producer, Ecopetrol, will be listed. According to Bogotá stockbroker Suvalor this stock issue will be valued at $5 billion.

In addition, some 20% of the country’s leading state energy transmission company, Isagen, will be privatized, valued at $200 million (some 30% of Isagen’s equity has already been listed).

A programme undertaken by the Bogotá stock exchange, called Colombia Capital, is also helping several small companies to gear up to listing on the stock market for the first time. These include paper producer Carvargal, vegetable oil maker Alianza Team, and dairy products maker Alqueria.

Camila Pérez Marulanda, head of economic research at Suvalor, says: “There are several factors that are making the Colombian stock market more attractive to foreign investors. One of them is the country’s economic stability. Another is new corporate governance regulations which have led many of the country’s leading companies to become more transparent.

“The programme, Colombia Capital, is providing a lot of important support to small firms wishing to list for the first time. Furthermore, the Inter-American Development Bank is heavily subsidizing the investment banking fees for these companies wishing to list.”

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