Summary of Proposed Investment
Project Number
11247
Company Name
GRUPO DE INVERSIONES SURAMERICANA S A
Date SPI Disclosed
Nov 13, 2001
Country
Colombia
Industry
Financial Markets
Projected Board Date
Dec 13, 2001
Status
Completed
Sector
Composite Insurance (Life and Non-life)
Department
Global Industry, Financial Markets
Environmental Category
B - Limited
Previous Events
Approved : Jan 10, 2002
Signed : May 28, 2002
Invested : Sep 4, 2002
Project Description
The project consists of a corporate investment package that is designed to support various organizational and financial measures that are being undertaken by the Suramericana Group.
SIGhas an impressive track record of investment and growth. During the 1990s, the group established companies that moved to leadership positions in various sectors, including insurance, pension fund management, health care, banking and various retail and service sectors. Due to the peculiarities of the Colombian market, most investments were funded from within the group (by the holding companies together with other group companies that had excess cash balances). While this approach has served SIG well over time it has created a complex web of cross-shareholdings among group companies, thereby making them less transparent to external investors.
As part of the project, IFC will (i) assist SIG in the elimination of some of these cross-shareholdings; (ii) advise it on measures to improve corporate governance and transparency; and (iii) help it to significantly reduce the debt that has accumulated at the holding companies level as a result of the current structure.
The attractiveness of this Project for IFC stems not only from the direct benefits which would accrue to some of Colombia’s key companies (which are part of the Suramericana Group) but also from the benchmarks it will set for other Colombian companies in areas such as corporate governance and transparency that are key to the efficient functioning of domestic capital markets.
SIGhas an impressive track record of investment and growth. During the 1990s, the group established companies that moved to leadership positions in various sectors, including insurance, pension fund management, health care, banking and various retail and service sectors. Due to the peculiarities of the Colombian market, most investments were funded from within the group (by the holding companies together with other group companies that had excess cash balances). While this approach has served SIG well over time it has created a complex web of cross-shareholdings among group companies, thereby making them less transparent to external investors.
As part of the project, IFC will (i) assist SIG in the elimination of some of these cross-shareholdings; (ii) advise it on measures to improve corporate governance and transparency; and (iii) help it to significantly reduce the debt that has accumulated at the holding companies level as a result of the current structure.
The attractiveness of this Project for IFC stems not only from the direct benefits which would accrue to some of Colombia’s key companies (which are part of the Suramericana Group) but also from the benchmarks it will set for other Colombian companies in areas such as corporate governance and transparency that are key to the efficient functioning of domestic capital markets.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Mr. Andres Bernal
Carrera 43A No. 3 - 101, Piso 2
Medellin, Colombia
Carrera 43A No. 3 - 101, Piso 2
Medellin, Colombia