Cencosud reveals details of Wong-inspired share issue

Cencosud yesterday announced the issuing of a set of shares in Santiago de Chile with which to finance the acquisition of Peru's Grupo de Supermercados Wong and to allow the Wongs into the Cencosud set-up. The part of the operation that involves the Wong family mist be wrapped up by January 31, 2008, whilst the part relating to purchasing the Wong operation must be completed by December 31. The shares being issued are those left over from a capital increase carried out by Chile's retail giant in January 2005 (when it bought department-store chain Almacenes Paris). The shares cost US$4 apiece and thus the issue should raise US$580mil. Of the total, 49,750,000 shares will be acquired by the family Wong, the Peruvians thereby taking up a 2.5% stake in Cencosud, the third largest individual stake behind the family Paulmann and the impresario Jorge Galmez. Another 75 million shares will be sold on the Chilean exchange where the latter two plan to acquire a third. Another package of 20 million shares is to be aimed at a compensation plan for Cencosud executives.

Publication: SABI - Business News
Provider: South American Business Information
Date: December 29, 2007


Falabella keen to get best locations for itself in Peru

Chile's Grupo Falabella has expanded fast enough in Peru but now the retail group will try to speed up said expansion in light of the arrival locally of its Chilean rival Cencosud (which has purchased Grupo Wong, the local supermarkets leader).

Falabella has sent out the command from Chile that the best possible locations in the leading Peruvian cities must be bought up for future store developments. To get the ball rolling, this week Malls Peru, the local property wing of the Chilean group, acquired a plot of land in Cusco, measuring 10,000 square metres (a size that will permit the installation of two of the group's three big formats - Saga Falabella, Tottus and Sodimac); the project has already been dubbed Open Plaza Cusco. Meanwhile work has begun on what is expected to be a new Sodimac outlet on Avenida Quilca, Bocanegra (El Callao), alongside the recently-opened Tottus hypermarket.

Publication: SABI - Business News
Provider: South American Business Information
Date: December 26, 2007


CPPQ celebrates seventy-fifth birthday

Bruno Schenone, general director of Corporacion Peruana de Productos Quimicos (CPPQ), part of Grupo Brescia, is about to oversee his firm's seventy-fifth birthday celebrations, happy that CPPQ's sales have risen 140% over the last four years but concerned about the future of the paints sector. Schenone says that any attempt at growth could eat into margins across the Peruvian sector (which posts an annual turnover of US$150mil with CPPQ providing just over a third this year, US$52mil compared with US$43mil). The chemicals (paints) firm now makes 12% of its money from new products, having consolidated its brands portfolio. In the last three years, CPPQ has invested US$3mil in the implementation of security systems at its plants in Brena and Nana, the construction of laboratories and the expansion of its factory and warehouse capacity. In January, 2008, CPPQ's chemical materials plant wil grow by 40%.

Publication: SABI - Business News
Provider: South American Business Information
Date: December 24, 2007


Peruvian Govt Evaluates Olympic Peru Proposal for Construction of Piura-Chimbote Gas Pipeline

The Energy and Mines Ministry of Peru is currently evaluating the proposal of the Peruvian gas company Olympic Peru for the construction of a natural gas pipeline, which will connect the northern department Piura with Chimbote, located in the northwestern department Ancash, the daily Andina said on December 20, 2007.

Olympic Peru plans this construction as it wants to deliver gas to industrial clients in Chimbote, mainly fishing companies. The investment value of the project has not been determined yet.

It is not clear yet when the government will take a final decision on the issue, the Energy and Mines Minister, Juan Valdivia, said.

According to data from the country's state oil sector promotion agency Perupetro, Olympic has natural gas reserves mainly in block XIII.

Publication: Business Digest
Provider: AII Data Processing Ltd.
Date: December 21, 2007


Dubai Ports World Callao set to tap Muelle Sur terminal developer

Dubai Ports (DP) World Callao is set to choose next week the firm that will be in charge of building the new Muelle Sur terminal at Callao port, Peru's largest, government news service Andina reported.

Four companies presented economic proposals to DP World Callao, company CEO Maciek Kwiatkowski said without naming the companies or the countries from which they come.

DP World Callao - comprised of Dubai Ports and Spanish firm Uniport - was awarded the terminal's 30-year concession after submitting a proposal that involves total investment of US$617mn, including US$144mn for the common port area.

The consortium expects to launch operations at the terminal in 2010 but is still awaiting national port authority (APN) approval for the technical aspects of the project, including the new terminal design, which was done by engineering firm Royal Hakoning from the Netherlands, Kwiatkowski said.

The company's aim is to convert Callao into a hub port for the western coast of South America, which is already on its way to happening thanks to its geographical location, sustained export growth and the free trade agreements (FTAs) signed, he added.

Indeed, with the FTA recently signed with the US alone, container movement at Callao is expected to grow more than 20% a year, transport and communications (MTC) minister Juan Suito was quoted as saying.

At the same time, some US$204mn would be needed to improve highway access to Callao port, Andina reported.

Callao's regional government is working in conjunction with MTC and APN to define the financial structure needed to upgrade access to the port, Callao government's planning manager Daniel Casella said.

Roadworks are expected to begin in the second half of 2008 and include works on the highways Néstor Gambetta and Costanera - the latter which crosses various coastal districts of capital Lima.

Part of the finance may come from the additional US$144mn that DP World Callao offered for the development of common areas, APN head Frank Boyle said, while MTC's Suito added that part of the investment would probably have to come from government coffers.

Publication: Business News Americas - English News
Provider: Business News Americas
Date: December 17, 2007

German Siemens To Participate in Construction of Kallpa TPP in Peru

Siemens Power Generation, the power plant equipment arm of German electronics and engineering group Siemens AG, will participate in the second and third phases of the construction of Peru's thermoelectric power plant (TPP) Kallpa, Peruvian daily Andina said on December 17, 2007.

The TPP will be located in the district Chilca, south of the capital Lima. The second phase is expected to be completed in 2009, while the third one would be finished in 2010.

The first phase of the construction of the TPP was completed on July 24, 2007 after an investment of $80 mln (54.71 mln euro).

After completion of the three phases of the construction the Kallpa TPP will add 568 MW to the country's production capacity.

Investments during the second phase are expected at $90 mln (61.55 mln euro). The resources, to be allocated during the third and final phase, were not quoted.

Publication: Business Digest
Provider: AII Data Processing Ltd.
Date: December 18, 2007


InVita launches market's cheapest microinsurance policy

Peruvian life insurer InVita Seguros has launched a life policy with a monthly premium of one sol, local press reported.

It is the cheapest life policy on the market and provides coverage of up to 2,500 soles (US$835) for natural and 5,000 soles for accidental death, according to the reports.

The insurance company signed an agreement with NGO ProMujer to sell the policy to a potential customer base of around 40,000.

InVita is also in talks with two other NGOs to launch more microinsurance products at similar prices, financial daily Gestión quoted InVita chair Caridad de la Puente Wiese as saying.

Demand for individual life insurance is growing in Peru as the population's purchase power is increasing, de la Puente said. The life market as a whole has expanded 30% this year and the growth prospect for next year is even better, Gestión quoted her as saying.

Invita Seguros offers a wide range of life, annuity and retirement products.

Publication: Business News Americas - English News
Provider: Business News Americas
Date: December 14, 2007


IFC and Wachovia Co-Arrange Financing to Mibanco in Peru, Latin America’s First International Syndication for Microfinance

IFC, a member of the World Bank Group, and Wachovia Capital Markets, LLC have co-arranged a $40 million syndicated financing agreement that will enable Peru’s Mibanco (Banco de la Microempresa S.A.) to offer longer loan maturities to its microenterprise clients and reach more customers in rural areas.

The transaction is the first international syndication for a microfinance institution in Latin America. Mibanco has provided more than two million loans to low-income individuals and small businesses in Peru, many of whom had little or no prior access to formal credit institutions. IFC’s financing supports the bank’s growth strategy, which aims to expand the penetration of microloans outside the Lima area and in rural areas, where financing needs remain very high.

Rafael Llosa, Mibanco’s General Manager, said, “This financing, the first of its kind for a microfinance institution in the region, will allow us to continue diversifying our funding sources. It also supports Mibanco’s strategy for expanding our microfinance portfolio. We are very pleased with this transaction and with the continuing support from IFC, a long-term partner of ours since 2001.

This financing also opens Mibanco's access to the international financial community and sets an important precedent for the microfinance industry in the world.” Through this transaction, IFC and Wachovia Capital Markets, LLC, the mandated lead arrangers and bookrunners, have also helped Mibanco broaden its relationships with international banks. This significantly diversifies its funding base, a key ingredient for future growth.

Originally structured as a $30 million loan, the syndication was oversubscribed by $18 million and attracted 10 participant banks from North America, Europe, Asia, and Latin America. Lead arrangers with $5 million shares include Bancolombia, HSBC, Natixis, Rabobank, and State Bank of India, and Wachovia Bank. Co-arrangers with $3 million shares include Israel Discount Bank, Republic Bank, and WGZ Bank; Minlam Asset Management, a microfinance-focused fund, participated with $1.5 million.

Ritva Laukkanen, IFC’s Director for Syndication and Resource Mobilization, noted, “The success of this syndication represents a strong vote of confidence—in Mibanco and the region’s microfinance industry—from the international financial community. Promoting microfinance services, a pillar of IFC’s strategy, is a key tool for creating opportunities and eradicating poverty. It makes basic financial services available to those left out of the traditional banking system.”

"We are pleased with the success of this transaction, which reflects both the quality of Mibanco and the increasing interest in the international financial community to support microfinance,” said Carlos Perez, Managing Director of the Americas for Wachovia’s Global Financial Institutions and Trade Division.

"Microfinance institutions enable business development in impoverished areas by providing access to modern financial tools. We bring Wachovia’s support to Mibanco, including our experience and relationships with thousands of banks and financial institutions around the world.” IFC’s relationship with Mibanco started in 2001, when IFC extended a five-year, $5 million loan to help the bank expand its lending activities outside the Lima area. As Mibanco increased its lending and opened new branches, its funding needs increased, leading to a second loan from IFC, of $29 million, in June 2006. In April 2007, IFC extended a third round of financing, consisting of a $7 million subordinated loan (counting as Tier 2 capital) to support Mibanco’s capital base and high growth.

Building on its lending relationship, in June 2007 IFC became a shareholder in Mibanco with a 6.5 percent equity stake. About IFC IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives.

In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org About MIBANCO Mibanco is the leading microfinance bank in Peru.

It is the country’s largest provider of microfinance loans by number of clients served and the second-largest in terms of loan volume. As of September 30, 2007, it reported a 14.2 percent market share with total assets of over $512 million and net worth of $59 million. Mibanco has a network of 81 branches and 25 ATMs, serving a customer base of over 376,000. Mibanco’s strategy is to target the middle and lower sectors of the microfinance market, where the demand for microcredit is highest and the supply weakest. Mibanco offers both lending and savings products. Loans are used for working capital and fixed investment needs.

Publication: International Finance Corporation - Press Release
Provider: International Finance Corporation
Date: December 14, 2007


ProChile: Peru an interesting export destination for software developers

Peru is becoming an increasingly attractive export destination for Chilean software, according to Chile's government export promotion agency ProChile.

Chilean financial daily Diario Financiero reported ProChile's Lima office as saying that currently there are few foreign companies competing with local Peruvian software developers with applications for niche markets such as construction, health, finance and web design.

Demand for such applications, which boost competitiveness and efficiency of company processes, is growing, according to ProChile.

Peru has favorable legislation for companies exporting software to that country.

Imported packaged and tailor made software only pays taxes on the physical means in which the software is transported, such as the CD, unlike in Chile where a tax is also levied on the actual content of the software.

ProChile also sees opportunities for applications for the growing telecoms sector.

According to statistics of consultancy IDC, IT investments in Peru are expected to grow 15.8% this year compared to 2006, reaching a total value of US$800mn.

Publication: Business News Americas - English News
Provider: Business News Americas
Date: December 12, 2007


Hochschild increases interest in EXMIN to 19.9%

Peru's Hochschild Mining has agreed to purchase via private placement an additional 2.74mn common shares of Vancouver-based EXMIN Resources, the companies said in separate statements.
After completing the transaction Hochschild (LSE: HOC) will have increased its stake in the Canadian miner by some 3.05% to 19.9%.

Each EXMIN (TSX-V: EXM) share will be sold at Cdn$0.40.

The transaction is expected to close on or around December 14.

Proceeds of the placement will be used at the Moris Mine in Mexico, which poured its first gold-silver dore in October and is jointly owned by Hochschild with 70%, with EXMIN holding the remaining 30%.

Publication: Business News Americas - English News
Provider: Business News Americas
Date: December 10, 2007

Scotiabank, N-Via launch m-payments service in Peru

Provider of financial services and money transfer services N-Via USA has teamed with financial services provider Scotiabank Peru to offer mobile money payments service with cash out options through Scotiabank Peru's more than 400 service outlets in 27 cities across Peru. US-based N-Via is specialised in financial services and money transfer, including prepaid debit cards, bill payment, mobile payments and mobile to mobile transfers. According to the Interamerican Development Bank's Multilateral Investment, Peru receives USD 2.86 billion in annual remittance, the seventh largest receiver in Latin America.

Publication: Telecom.paper News
Provider: Telecom.paper
Date: December 10, 2007

Jiangxi looks to Peru for concentrate boost

Jiangxi Copper`s self-sufficiency in copper concentrate will be significantly boosted by its proposed joint acquisition of Northern Peru Copper Co (Noc), the company told MB.

This year Jiangxi will produce some 150,000 tonnes of copper concentrates from its own Chinese mines, supplying just 30 percent of this year`s expected production of 500,000 tonnes. The balance is made up from imports.

But following the launch of a new smelter in September, the company`s capacity is now 700,000 tpy.

Noc`s key Galeno copper-and-gold resource, based in Peru, is expected to produce an average of 200,000 tpy in the first five years of its life, a large proportion of which could be supplied to Jiangxi, according to officials at the Chinese company.

"As Noc controls the Galeno mine, our concentrate supplies will be significantly boosted after the full development of the mine," said one official. "However, the specific figure is not available yet."

Jiangxi Copper, China`s biggest copper smelter, has agreed to buy Noc with China Minmetals Nonferrous Metals Co Ltd (Minmetals) in a deal worth C$455 million ($450 million) (MB Dec 6).

Noc has not set a date for commissioning its Galeno mine, but Jiangxi and Minmetals said they may spend three to four years developing it. A feasibility study carried out by Northern Copper is due to be completed in the middle of next year.

"Noc has already been a supplier of our copper concentrate," said a second Jiangxi official.

Noc is a Vancouver- and Lima-based copper exploration company that controls the Galeno project, which boasts 3.3 million tonnes of copper reserves, 79 tonnes of gold and 86,000 tonnes of molybdenum.

Jiangxi Copper and Minmetals plan to set up a joint venture for the management of the Noc with an investment of 1.15 billion yuan ($155.5 million). Minmetals will hold 60 percent of total stake while Jiangxi copper will hold the remaining 40 percent.

Publication: Metal Bulletin
Provider: Metal Bulletin com
Date: December 10, 2007


Rimac expects microinsurance segment to grow 50% in 2008

Peruvian insurer Rimac Seguros expects the country's microinsurance market to grow 50% next year to US$5mn compared to 2007, local financial daily Gestión reported.
The potential microinsurance market in Peru is from 15mn-18mn people, said José Cordano, Rimac manager for non-traditional distribution channels.

Non-traditional distribution channels like retail stores, small neighborhood shops and drugstores are key for insurers looking to reach Peru's low-income population, Cordano said.

Cordano also said microinsurance sales are being helped by increased bank penetration in Peru as insurers offer newly banked people low-cost policies to protect their plastic.

Publication: Business News Americas - English News
Provider: Business News Americas
Date: December 7, 2007


Inca Pacific releases feasibility on Magistral

Vancouverite Inca Pacific Resources (TSX-V, BVL: IPR) has released the final feasibility study for its Magistral copper-molybdenum project in Peru's Ancash department.

The study outlines a 2011 startup and 7Mt annual throughput for a 15-year mine life to produce 34,100t/y of copper and 2,860t/y molybdenum, the company said in a statement, adding the strip ratio is 2.2:1.

The project has a US$146mn net present value at an after-tax 8% discount rate and an internal rate of return of 14.9%. The study also determined a capital payback of 3.3 years for an initial capital expenditure of US$402mn.

"I am very pleased that, while capital costs have escalated, we do have a robust project with a rapid payback," Inca Pacific CEO Anthony Floyd said in the statement.

The company must present at least one letter from a financial institution backing the project to the government of Peru for the feasibility to be considered bankable.

Publication: Business News Americas - English News
Provider: Business News Americas
Date: December 6, 2007


Maple begins ethanol feedstock dev

Dallas-based integrated energy company Maple Energy (AIM: MPLE) has started development of its first seed cane plot in Peru's Piura region.
The plot will provide seed sugarcane for the company's sugarcane estate, which in turn will provide feedstock for Maple's planned ethanol plant.

Third-party contractors are preparing the land for the installation of drip irrigation systems, the company said in a statement.

"The La Huaca seed cane farm represents a significant milestone in Maple's planned 30Mg/y [114Ml/y] ethanol project," Maple chairman and executive director Jack Hanks said.

In October, Maple leased 58ha of land near La Huaca village, which is close to the Chira river and the company's 10,676ha estate. Roughly 47ha of the leased land will be planted with sugarcane.

Eight to 10 months after planting, each hectare of seed cane will provide enough material to plant 10-12ha of commercial cane land. The seed cane program will be expanded through 2008 to about 320ha, the statement said.

Publication: Business News Americas - English News
Provider: Business News Americas
Date: November 30, 2007