Latin America: European companies compete for Solarte road acquisition

30 April 2018 - 12:00 am UTC

Correction: An earlier version of this article incorrectly said CASS Constructores holds 85% of Autovía Neiva Girardot. The 85% equity holder is CSS Constructores.

European developers are among the bidders for a 51% stake in Colombia’s USD 265m Neiva – Girardot highway, Inframation understands.

UK emerging markets investor Ashmore, France’s Vinci as well as Spain’s Abertis and Globalvía are understood to have bid for the 197km highway outside Bogotá.

Colombia’s Constructora Colpatria and a sixth unnamed bidder are also understood to have participated in the process.

The sellers are this week set to shortlist two or three bidders ahead of binding bids at the end of June, a source briefed said.

The current owner is the SPV Autovía Neiva-Girardot, which comprises Colombian developers CSS Constructores (85%) and ALCA Ingeniería (15%).

ALCA aims to sell its entire stake, while CSS would reduce its holding to 49%. The contract includes the equity share, but not the EPC obligations, it is understood.

Globalvia win would mark its entry into the Colombian market. Abertis, for its part, has held a 40% stake in Coviandes — the SPV behind the Bogotá-Villavicencio highway — since 1994 but has yet to participate in the country’s USD 20bn-plus 4G program. 

Vinci entered into a strategic partnership with local developer Conconcreto in July 2015 and bought into the equity of the Bogotá-Girardot third lane concession in September 2016. 

This process is the first of a series of road concessions that could come up for sale amid a corruption investigation into Carlos Solarte, the local businessman behind developer CSS Constructores.

Solarte also holds stakes in the following projects:

-Santana – Mocoa – Neiva;
-Popayán – Santander de Quilichao;
-Bucaramanga – Pamplona;
-Buga – Buenaventura

The roads will require an investment of more than COP 8trn (USD 3bn).

Inframation first reported on the sale on 8 February. The SPV has hired Bonus Banca de Inversión to advise on the transaction.

The sellers’ priorities include completing the transaction as quickly as possible.

Background
In October 2015, the Autovía Neiva Girardot consortium signed a 30-year PPP DBFOM contract for the 197km Neiva-Girardot highway for COP 836.7bn (USD 301.2m). It is an unsolicited project, meaning it will not receive availability payments from the government. Revenues are generated solely by tolls.

It will connect Bogotá with cities in the south, traversing Pasto, Mocoa, Florencia and Tumaco.

Part of the road is already operational and generating revenue. Construction works have upgraded existing road and added second lanes to 46km and 32km stretches between the municipalities of Flandes and Tolima, and Neiva and Aipe.

The SPV signed a triple-tranche COP 773.3bn (USD 265m at the time) financing package with Bancolombia and infrastructure debt fund Union Para la Infraestructura (UPI) last January, but that loan has yet to be disbursed.

 

Girardot