BOGOTA -(Dow Jones)- Colombian holding company Inversiones Argos SA (ARGOS.BO) said late Wednesday it is evaluating the possibility of selling a minority stake in its cement maker Cementos Argos SA (CEMARGOS.BO).
InverArgos hired four investment banks Bancolombia SA (CIB), Citigroup Corp. (C), JPMorgan Chase Co. (JPM) and Banco Santander SA (STD, SAN.MC) to evaluate the market situation and seek potential buyers for between 5% and 9.73% in Cementos Argos, the country's largest cement maker, the company said in a filing to the Colombian market regulator.
"The proceeds of the sale would go mainly to pay the debt Inversiones Argos contracted to acquire an important stake in Colinversiones SA (COLINVERS.BO)," the filing said.
In another filing to the regulator, InverArgos said it will borrow COP500 billion from local bank Banco de Bogota SA (BOGOTA.BO) to finance the acquisition of a 15.07% stake in power generator EPSA earlier this month.
In mid 2008, InverArgos started to diversify its assets to include electricity - through Colinversiones and EPSA - besides cement. The company considered, like Colinversiones, that the business of generating electricity has great possibilities for growth and the existing regulations guarantees profitability.
The stake would be worth between 590 billion Colombian pesos ($299 million) and COP1.15 trillion at current market prices, Jairo Agudelo, who covers the company for the country's largest brokerage Interbolsa. The company will have to offer a discount to the buyer, he added.
He said Inversiones Argos currently owns 70.33% of Cementos Argos.
The sale of the stake in Cementos Argos is good for InverArgos, which keeps its debt, which already stood at COP3 trillion, at reasonable levels, Agudelo said.
Shares of InverArgos rose 1% on Thursday to COP16,060, while shares of Cementos Argos fell 4.7% to COP10,240 as investors anticipated the sale.
- By Inti Landauro, Dow Jones Newswires; 57-1-610 70 44, Ext: 1131; colombia@dowjones.com