LatinFinance - January/February 2016 - 41

LUC GERARD, TRIBECA

"THERE ARE MORE
PLAYERS ARRIVING
WITH A BIGGER
APPETITE AND THE
MARKET IS STARTING
TO GAIN A GREATER
UNDERSTANDING
OF PRIVATE EQUITY
FUNDS AND WHAT WE
CAN DO"
Mercantil Colpatria and Bancard - bought
the thermal power complex.
"By obtaining regional buyers we found
companies with a constructive approach
to local specificities in an environment
where international players would
have conducted complex arbitrages,"
Gerard adds. "Regional players see
Termocandelaria as lower risk and higher
return and were willing to value the assets
fairly."
Private equity funds and pension
managers are well-placed to help finance
the region's towering infrastructure needs,
Gerard says.
"Private equity in Latin America has
changed a lot," he says. "There are more
players arriving with a bigger appetite
and the market is starting to gain a greater
understanding of private equity funds and
what we can do."
The transaction presented its challenges.
Tribeca had to consider foreign exchange
volatility, a power purchase agreement
maturing in 2016, and weak oil prices
impacting Colombia's economic growth.
In a bid to mitigate FX volatility, Tribeca
turned to regional funds already invested
in the region's power sector that wanted
to diversify their portfolios. SCL Energía,
a power-focused fund, is backed by
regional pension funds, family offices and
development banks. Mercantil Colpatria
was keen to diversify its holdings outside
of financial services, construction and
insurance, and made its first step into
Colombia's power sector through this deal.
Gerard is confident that further
successful divestments are ahead for
Tribeca. The fund was due to exit another
infrastructure-related project in Bogotá in
December.

"This year has been one of our best
years to date, even among all the negative
economic sentiment across the emerging
markets," Gerard says. "Infrastructure
remains important to our success as there
are a lot of companies and projects that
need to service this development, but we
expect to be active in healthcare as well."
BNP Paribas advised Tribeca, while
Bancolombia, Banco de Bogotá and
Scotiabank provided acquisition financing
to the purchasing group. Philippi
Prietocarrizosa & Uria was legal counsel
to Tribeca. Bogotá-based Gómez-Pinzón
Zuleta Abogados and Santiago-based Prieto
y Cia and Barros & Errázuriz Abogados
were legal counsel to the Chilean buyers. LF

DOMESTIC M&A DEAL

GRUPO CLARÍN/
NEXTEL COMMUNICATIONS ARGENTINA
An Argentine acquisition
illustrates the impact of the
country's changing political
landscape for corporates
looking to capture growth
Argentina, it seems, is on the precipice
of change. The Mauricio Macri-led
Cambiemos coalition won the presidential
elections in November and has promised
an open market economy with less capital
controls and a floating Argentine peso.
Capital markets deals hit the screens
merely hours after Macri made his victory
speech. Pampa Energía priced an equity
follow-on offering, raising about $86 million
in late November. Pan American Energy
issued 1 billion peso ($102.3 million) 2020
bond, while state-run oil producer YPF
tapped the market twice in December,
selling a 1.4 billion peso 2028 bond and
reopening its 2018 notes, ultimately adding
$100 million to the issuance.
While the boon to equity and debt
capital markets was notable, Grupo
Clarín's purchase of a stake in Nextel
Communications Argentina perhaps most
directly points to the optimism surrounding
the change in the country's politics, as
the companies overcame cumbersome

Buyer: Grupo Clarín
Seller: NII Holdings
Asset: 49% of Nextel Argentina
Sale Price: $178m
Supporting Banks: Deutsche Bank,
Citi
Law Firms: Cleary Gottlieb,
Bruchou, Fernández, Madero &
Lombardi, Jones Day

regulatory challenges and some uncertainty
to complete the deal.
Grupo Clarín closed its purchase of a 49%
stake in Nextel for $178 million in September,
with a view to acquiring the remaining
stake in the company after the country's
presidential elections in November.
Argentina's telecoms regulator, Aftic,
attempted to block the deal. However, Clarín
successfully filed an injunction against Aftic
in November, allowing the transaction to
stand.
"This deal recognizes the new political
reality in Argentina," one lawyer close
to the deal tells LatinFinance. "Now
that the regulatory approval is in place,
Clarín can take on the outstanding 51%
of Nextel, something that would not
have been possible under the previous
administration."
Deutsche Bank was financial advisor to
Grupo Clarín, while Citi advised US-based
NII Holdings, the owner of Nextel. Cleary
Gottlieb was legal counsel to Grupo Clarín,
while Jones Day and Bruchou, Fernández
Madero & Lombardi represented NII
Holdings.
Nextel is the fourth-largest
telecommunications company in
Argentina. The deal signals the intent of
Clarín, which is established in print and
cable television media, to tap the cellular
telecommunications market.
It also gives Clarín an opportunity to use
its local Argentina business experience,
an M&A banker monitoring the deal says.
"Local players in Argentina are more
understanding of the political situation in
the country and are better-positioned to
take on certain risks that foreign investors
are reluctant to do," he says. "Clarín is well
aware of the telecom's potential in Latin
America, so it's a step in the right direction
among a new era for Argentina business." LF

January/February 2016 - L ATINFINA NCE.COM 41
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Table of Contents for the Digital Edition of LatinFinance - January/February 2016
