Highways of the Café, Colombia.

Most notable events

In 2016, Grupo Argos achieved consolidation of the concessions business as its third pillar of infrastructure. Upon acquisition of an additional percentage of Odinsa in a new takeover bid and purchase of 30% of Opain S. A., the company positioned itself as one of the most important infrastructure holding companies of the region.

Grupo Argos closed the year with a shareholding of 98.6% in Odinsa, after purchase of an additional 43.8% to 54.8% with which it culminated in 2015. The value of the transaction amounted to 816 billion pesos, of which, 83%, i.e., 677 billion, was paid with preferred shares of Grupo Argos.
This reflects the confidence of the Odinsa shareholders in our organization, enabling them to maintain exposure to the infrastructure, plus an attractive portfolio of other businesses and geographies with growth potential.

Likewise, we highlight the acquisition, for an amount of 480 billion pesos, of 30% of Opain, dealer of cargos and passenger terminals at El Dorado International Airport, the third largest in Latin America, allowing access to control over 65% of this company (considering that Odinsa already owned 35%).
With these movements, Grupo Argos consolidates a strategic portfolio with approximately 45 trillion pesos in assets under management, focused in cement, energy, road, harbor and airport concessions, urban development and real estate income, which, added to the portfolio investments in the food and financial industries, offers complementarity and diversification in terms of geographies and currencies.

When it comes to our strategic investments, we indicated that the cement business completed the purchase of the cement plant in Martinsburg, West Virginia, and eight logistics terminals, which increased its installed capacity by 29% in the United States, reaching 9.9 million tons, and which today generates about 50% of its income. This acquisition expands the presence of the company from nine to 13 states, adding important operational, technological and logistical capabilities, positioning itself in a privileged way to capture the expectations of increased infrastructure spending, estimated to be close to 1 trillion dollars in the next five years. For this operation, 660 million dollars were invested, funded with a bridge loan being paid, mostly, with resources coming from a non-strategic asset divestment plan that has been in place since 2016. By January 2017, that plan had already reached 296 million dollars.

In the energy business the positive operational results were restarted, generating an EBITDA of over one billion pesos, leaving behind the complex effects of the climatic, regulatory and contractual conflicts that were experienced in 2015, a product of the “El Niño” phenomenon, the lack of gas supply and the regulatory disruption of the electric industry. We highlight the Celsia team’s work in efficiency, which contributed to the implementation of improvements and the proposal of regulatory changes. Moreover, Celsia advanced positively in the structuring of its supplementary innovation platform, headed towards exploration of renewable energy, primarily solar, and an attractive set of new business models in incubation around distributed generation, representing a fresh look to an evolving industry.

In concessions the most attractive projects were selected and control over them was consolidated, with interests that help build the business model and strengthen synergy operations generating value. Throughout the year, the divestiture scheduled of assets not related to the core businesses was also developed, leading to efficient rotation of invested capital. In 2016, the financial close of the Pacific 2 Highway Connection project was concluded with participation of international and domestic banking for an amount of 1.2 trillion pesos. Odinsa transitioned from an equity stake of 25% to 79% in this project, which is in process of construction and expected to enter into operation in 2020.

Urban Development in Northern Barranquilla, Colombia.

Regarding airport matters, Odinsa’s concessions grew in cargos and passenger traffic, being recognized by users and companies specialized in the industry. At the El Dorado International Airport work in the second expansion continues for 400 billion pesos, increasing its capacity and service level in the domestic and international docks. The airport served 31.4 million passengers, with a positive variance of 4.7% in respect to 2015. It moved 667 thousand tons of cargos, with a slight decline of 0.6%, remaining the first airport in cargos and the third in passengers in Latin America.

Finally, in the real estate industry, the Urban Development business experienced an active dynamic and closed negotiations for 1.8 million of m2. The strategy was focused on optimizing resources from demand looking to maximize value. This business, formerly developed by the subsidiary Situm, was integrated into Grupo Argos to provide operational efficiency and maintain its focus and expertise.

In regards to real estate business, Pactia, which manages rental assets of more than 2.5 trillion pesos and a net leasable area of 504 thousand square feet, became Private Equity Fund, allowing the entry of Pension Fund Protection, with a commitment of investment up to 600 billion pesos, having achieved in 2016 a first contribution of 165 billion pesos.
This provides flexibility to fund the expansion plan.

The figures and specific achievements of each business are shown below.

Argos is the Colombian company with the most assets in the United States.

It supplies states such as Virginia, New York, New Jersey, Maryland and Washington D.C., among others.