Latin America: SPV behind Neiva-Girardot highway seeks controlling equity partner

08 February 2018 - 12:00 am UTC

The SPV behind the 197km Neiva-Girardot road in Colombia has issued teasers to interested parties for the sale of a 51% stake in the concessionaire.

The SPV Autovía Neiva–Girardot comprises domestic builders CSS Constructores (85%) and ALCA Ingeniería (15%). CSS Constructores is controlled by Colombian construction firm Carlos Alberto Solarte.

The SPV hired Bonus Banca de Inversión as financial advisor for the M&A transaction. 

Inframation understands that the members aim to sell control (51% stake) of the SPV to a new member. ALCA Ingeniería would exit, selling its 15% stake, while CSS Constructores would initially sell 36% of shares.

Non-binding offers are due by mid-March. The SPV is targeting a mid-year close for the transaction.

The price will be determined by three main elements: the equity value of the SPV, the ability of the buyer to settle the transaction as quickly as possible and, alternatively, on the ability of the buyer to participate or modify the terms of the EPC contract.

Autovía Neiva Girardot signed in October 2015 a 30-year PPP contract to design, finance, build, operate and maintain the 193km Neiva-Girardot highway for COP 836.7bn (USD 301.2m). It is an unsolicited project, which does not receive availability payments from the government. Revenues are generated solely by tolls.

It will connect Bogotá with southern cities of the country, traversing Pasto, Mocoa, Florencia and Tumaco.

Part of the road is already operational, generating revenue. Construction works have upgraded existing road and added second lanes to the 46km and 32km portions 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) in January last year. The loan has yet to be disbursed.