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A recent IPO carried out by Colombian construction firm El Cóndor could serve as a model for infrastructure finance in Colombia, Jean Pierre Serani, director of corporate finance at Bancolombia (NYSE: CIB), told BNamericas.
Bancolombia acted as the lead bookrunner for the IPO, which ended March 27. El Cóndor aimed to raise at least 150bn pesos (US$84.3mn), and looks to have easily surpassed its goal due to high demand.
"That a company with El Cóndor's credentials has gone onto the market and has had the high demand that it did shows strong support from the market in betting on Colombian sponsors who are taking part in the country's investment to overcome its infrastructure gap," Serani said.
The IPO received strong interest from retail clients and institutional investors in Colombia, and also attracted international investors such as US investment funds. Other companies in the sector such as Odinsa, in which El Cóndor has a 15.9% share, and construction firm Conconcreto have seen their shares gain value in the past month.
The share offering could successfully be copied by other companies in Colombia's infrastructure sector to take advantage of the upcoming boom in large projects in the sector, according to Serani. The country is planning investments of some 99.3tn pesos over the next 10 years in infrastructure such as highways, ports and railways.
"Making up for lost time in Colombian infrastructure investment will require projects on a very large scale. That will bring in sponsors, construction firms or investors from outside of Colombia, with important experience and financial capacity. But it also means local construction firms need to be better prepared, not just in technical capacity but also when it comes to financing," Serani said.
Serani spoke at the BNamericas Andean Infrastructure Summit, held in Bogotá from March 28-29.