Colombia’s Aval to Seek as Much as $1 Billion in New York Share Offering

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Grupo Aval Acciones y Valores (AVAL) SA, Colombia’s biggest financial holding company, will seek to raise $500 million to $1 billion by listing shares in New York and may use the funds to buy banks in Central America and the Caribbean, Chief Executive Officer Luis Carlos Sarmiento Gutierrez said.

The company won’t sell stock in New York until preferred shares issued last month in Bogota, which have fallen 3.4 percent, show a “more convincing” performance, Sarmiento, 50, said in an interview yesterday at his office in Bogota. Common shares in Grupo Aval have dropped 24 percent this year, the third-worst performer on Bogota’s IGBC index.

“In a couple of months, things will turn around,” he said. Aval is in talks with four U.S. investment banks about helping to underwrite the New York listing, he said.

Aval raised $1.1 billion by selling the preferred shares last month, helping pay for last year’s $1.9 billion acquisition of General Electric Co.’s BAC Credomatic, Central America’s second-largest bank. It is the second-largest offering in Colombian history after state-controlled oil company Ecopetrol SA raised $2.7 billion when it sold a 20 percent stake in 2007.

Sarmiento said the company may use the capital raised in New York to fund acquisitions under consideration in El Salvador, Guatemala and the Dominican Republic.

Aval’s holdings include Banco de Bogota, Colombia’s second- biggest lender, Banco AV Villas and Banco de Occidente SA, the country’s fifth-biggest lender.

Banco de Bogota will sell bonds worth at least $1 billion this year in its first overseas debt issue, Sarmiento said.

Share Sales

Bancolombia SA, the country’s largest bank, is currently the only Colombian bank with ADRs listed in New York.

At least four Colombian companies are selling shares to finance expansions abroad.

Avianca Taca Holding SA , Colombia’s largest airline, and Grupo Nutresa SA, Colombia’s biggest food company, have issued stock this year to fund investment while Ecopetrol SA, Colombia’s largest oil company, and Grupo de Inversiones Suramericana SA, parent company of Colombia’s largest bank, have announced plans to do so.

Sarmiento is the son of Colombia’s richest man, Luis Carlos Sarmiento Angulo, whose wealth nearly doubled last year to $10.5 billion, making him the world’s 75th most wealthy person, according to Forbes magazine.

Banco de Bogota issued 2.5 trillion pesos of convertible debt as part of the BAC Credomatic transaction. Moody’s Investors Service last month upgraded the company’s foreign currency rating to Baa3, the lowest investment grade, from Ba2.

Sarmiento said the bank will take advantage of the “opportunity” created by the upgrade to sell bonds this year.

Fuente: Bloomberg.