COLOMBIA: Brewer Bavaria separates from Valores Bavaria

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Colombia's Santo Domingo group decided on 31 October a total separation of its subsidiaries, the brewer Bavaria and Valores Bavaria. The investment group began the separation process in 1997.

The two companies will be separated in both their administration and finances. Bavaria director German Montoya said the separation will mean that "there will no longer be loans issued between the two companies."

Bavaria has been loaning funds to Valores Bavaria since 1997 to cover for cash flow shortages. As of September 30, the loans had accumulated to a total of US$36.6m including interest. In exchange for the loans, Bavaria shareholders received Valores Bavaria stocks.

Valores Bavaria has been profitless in recent years because of economic conditions in Colombia. Negative performance of its holding Avianca Airlines was a major factor in the company's overall losses.

Bavaria will be led by Ricardo Obregon and will take on only the brewing operations. The company is developing plans to expand into Panama, Honduras and the US.

Leonor Montoy will be president of Valores Bavaria, which will manage Bavaria Valores holdings like Avianca Airlines, Orbitel, Caracol Radio and Caracol Television.

Bavaria and Valores Bavaria workers responded negatively to the separation.

Valores Bavaria stock dropped 7.56%t after the Santo Domingo announced its decision. Bavaria's stocks remained unchanged.

To view related research reports, please follow the links below:-

Beer in Colombia
Beer in Central and South America

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