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Medellin-based textiles and plastics-recycling specialist Enka de Colombia announced in a January 18 filing with Colombia’s Superfinanciera oversight agency that it has finally completed a financial restructuring that has satisfied its creditors and cut net debt to near-zero.

The company has “successfully completed the restructuring agreement under Law 550 of 1999, after fully complying with the commitments with our creditors, among which were financial entities, suppliers, bondholders and government entities,” according to the filing.

“We do so strengthened as a profitable and solid company, with a net debt level close to zero and ample financing capacity to continue undertaking our growth plans,” the company explained.

“Today the company is a leader in the recycling of post-consumer PET [polyethylene terephthalate] bottles in the country and has the largest PET recycling plant in South America.

“In addition, we are the main producer of ‘Nylon-6’ in America, a strategic ally of the world’s leading tire manufacturers, and the main producer of fibers and synthetic filaments in the Andean region with an export focus,” Enka added.

In 2002, Enka had suffered a financial crisis “due to an economic liability amounting to COP$320 billion [US$80 million], which led us to take advantage of Law 550 of 1999 through a 19-year restructuring agreement, seeking the best alternatives to transform the organization and protect our direct and indirect jobs,” according to the company.

“In 2007, following the debt capitalization plan, we entered the Colombian Stock Exchange, managing to capitalize, that year alone, COP$180 billion [US$45 million] and close to COP$226 billion [US$56.5 million] throughout the agreement, corresponding to 70% of the debts.”

Meanwhile, technological updates “played a relevant role in the growth of the company, enabling us to focus investment on the development of more specialized products and the opening of new high-value markets,” according to Enka.

As a result, in 2009, Enka entered the PET bottle recycling market for manufacture of synthetic fibers, and then in 2014 it launched “bottle-to-bottle PET recycling,” first in Colombia.

“Recycling has become one of the company’s most important and promising businesses. Currently more than 50% of our products are manufactured from recycled raw materials, with which we not only contribute to the environment, but also generate great benefits for the country’s recycling sector,” the company added.


Colombian banker Jaime Gilinski’s JGDB Holdings and its financing partner Royal Group (Abu Dhabi) on January 12 reported to Bolsa de Valores de Colombia (BVC, Colombia’s stock exchange) that it has finally acquired more than 27% of the shares of Medellin-based multinational foods giant Grupo Nutresa – far short of its 50.1% to 62% goal.

Meanwhile, the JGDB-Royal group simultaneously has now acquired at least 25% of Medellin-based multinational finance giant Grupo Sura -- also far short of any controlling interest.

However, the new shareholdings in Nutresa and Sura assure that Gilinski’s group will gain board seats on those companies, part of the so-called “Grupo Empresarial Antioqueño” (GEA), where each company holds significant shares in the others.

Beyond gaining board seats, no-one knows for sure what Cali, Colombia-born Gilinski proposes in order to make profitable changes with those companies -- although there’s an assumption that his GNB Sudameris bank eventually would merge with Bancolombia, the latter of which Grupo Sura already holds a commanding interest.

There’s also speculation that Gilinski eventually will launch further rounds of stock bids, in order to boost shareholdings above the 50% required for controlling interests.

Gilinski years ago had been in a lengthy legal battle over control of Bancolombia -- a lawsuit that essentially terminated with no winners or losers.

But some see his new shareholding in Sura (with Sura’s simultaneous holding in Bancolombia) as a sort of sweet revenge, given that he and his dollar-rich Abu Dhabi backers bought the new holdings using an historically favorable dollar-to-peso exchange rate.

The total investment by the Gilinski group in the new share acquisitions of Sura and Nutresa are just shy of US$2 billion – providing a big shot-in-the-arm to what had been a sagging Colombia stock market, as the value of the U.S. dollar against the Colombian peso has soared to around COP$4,000/US$1 in recent months.

BVC now only has to certify the Sura/Nutresa stock deals in the next few days, in order to make the Gilinski acquisitions official.


Medellin-based electric power giant EPM announced last night (December 23) that in addition to the US$983.4 million (COP$3.84 trillion) that project insurer Mapfre is paying for Hidroituango hydroelectric-project damages, Medellin-based insurance giant Sura just paid an additional US$100.6 million for “civil director” claims also arising from a 2018 diversion-tunnel collapse at Hidroituango.

In addition, lesser insurers Axa and SBS likewise just contributed US$5.3 million and US$500,000 toward the “civil director” insurance claims, according to EPM -- bringing the grand total of all insurance payoffs for Hidroituango to US$1.1 billion (COP$4.3 trillion).

As a result of these final payoffs, from now on EPM will self-insure against possible future damages at Hidroituango, according to the company.

EPM Forfeits Favorable US$450 Million IDB Loan

Meanwhile, on another front, EPM announced December 23 that it has now paid-off and forfeited a favorable US$450 million loan from the Interamerican Development Bank (IDB) for Hidroituango financing – as demanded by IDB as a result of an earlier Colombian Controller-General claim against 28 contractors, politicians, officials and insurers accused of “gross negligence” that supposedly contributed to a diversion-tunnel collapse at Hidroituango.

Colombia’s undemocratic system of Controller-General prosecutions and persecutions against companies and individuals utterly lacks the normal due-process guarantees given to all citizens and companies in democratic nations such as in North America and Europe.

Without constitutional guarantees of the right to bring a proper legal defense against prosecution -- along with an independent judiciary that ought to adjudicate such Controller-General claims – more companies will think twice about investing in Colombia, as the three major Hidroituango contractors have publicly warned here.

Such lack of reasonable, constitutional legal guarantees for all defendants could cost Colombia tens of billions of dollars in investments in urgently needed infrastructure projects, while simultaneously hobbling jobs growth, tax revenues and economic/social progress -- as many private companies, labor unions, trade associations, independent news organizations and civic-minded politicians have publicly warned here.


Medellin-based electric power giant EPM announced this afternoon (December 16) that it just finalized an agreement with the existing, principal constructors of the US$5 billion Hidroituango hydroelectric plant -- hence enabling continued construction through November 2022.

The deal includes an eight-months extension seen required to finish current installations that would guarantee start-up of the first power turbine in July 2022, and then start-up of a second turbine in November 2022 -- plus three months for training a new set of contractors expected during a hand-over period.

The 11-months contract extension deal comes on the heels of a December 10 agreement between Colombia’s Controller-General, EPM and Hidroituango project insurer Mapfre, which guarantees that Mapfre will pay US$983.4 million (COP$3.84 trillion) supposedly to cover Hidroituango damages, or else 90% of the projected cost to finish construction.

The other 10% supposedly would be covered by parallel policies with three lesser insurers to the project, including Medellin-based insurance giant Sura.

Still unresolved is a parallel COP$9.9 trillion (US$2.4 billion) damages lawsuit EPM earlier brought separately against the Hidroituango construction contractors, designers and consultants, a claim that -- if eventually upheld by some future court ruling -- would be cut by about half because of the Mapfre and other insurer payments.

According to Medellin Mayor Daniel Quintero (who chairs the EPM board of directors) that “other half” of damages claims – totaling roughly US$1 billion – supposedly would cover insurance deductibles and the cost of nearly four years of lost power sales, all caused by the 2018 collapse of a diversion tunnel at Hidroituango, setting-back completion by four years.

In a December 16 press release following EPM’s announcement of the Hidroituango contract extension, the “CCC Ituango Consortium” – including the three major contractors (Camargo Correa, Conconcreto and Coninsa Ramon H) – confirmed that they are almost certain to be excluded from the upcoming public bidding round to replace the existing EPM construction contract.

However, thanks to the Mapfre insurance payment, the three contractors wouldn’t be barred from participating in any other future local or national Colombian construction contracts, according to the CCC Ituango statement.

“The agreement between the CCC Ituango Consortium and EPM was achieved after the evaluation of the mitigation of the risks derived from the fiscal responsibility ruling issued by the Controller-General, which according to the statements of the Controller General of the Republic Carlos Felipe Córdoba, on the occasion of the agreement between EPM and Mapfre Seguros Generales de Colombia for the payment of compensation under the ‘All Risk Construction policy,’ at the moment the [insurance payment] resources enter [EPM’s coffers], any disability, any sanction, any effect due to rulings of the Comptroller General of the Republic” are nullified.

“We are grateful for the participation of President Iván Duque and of all the people who made possible the payment commitment of the insurers for the loss that occurred in the project.

“EPM’s decision to continue with the CCC Ituango Consortium [for the next 11 months] is a sign of confidence in our execution capacity and the quality of our services, and with this extension we reaffirm our commitment to execute as many works as possible in the defined period by EPM, so that the project objectives can be achieved,” according to the CCC Ituango Consortium statement.

However, thanks to certain questionable public accusations and political demagoguery employed by Medellin Mayor Quintero (and to a lesser extent by Controller-General Carlos Felipe Cordoba) in describing supposed construction/design errors, supposed “substandard materials” and non-specific allegations of “corruption,” the current contractors have suffered damage to their professional reputations – and Colombia has become a question-mark for foreign investors viewing the total lack of legal due-process in the prosecution and persecution against the contractors (at least to date), all despite what the contractors claim was the result of an undiscovered geological fault alongside the collapsed diversion tunnel -- and not any errors, substandard materials nor “corruption.”

Meanwhile, EPM, its electricity ratepayers, Medellin’s citizens (the actual owners of EPM) and the Colombian and international business sectors now can only hope that whatever future Hidroituango replacement contractors somehow (perhaps miraculously) will get up-to-speed inside the designated three-months hand-over period and complete the Hidroituango project on-time (by 2025, when all eight power turbines are supposed to be running), on-budget and on-quality.

But if Hidroituango isn’t well on-its-way to completion by 2025, then Medellin Mayor Quintero – who will have already left office by then (his term ends January 1, 2024) -- could see his political legacy sour thanks to his frenzied push to terminate the existing contractors, a decision that now puts Hidroituango’s timely completion at risk.


Centrist politician Sergio Fajardo – a former Antioquia Governor, former Medellin Mayor and now candidate for Colombia’s Presidency – this morning (November 30) publicly accused Colombia Controller-General Carlos Felipe Córdoba of shocking political manipulation and corruption in the Hidroituango hydroelectric-project damages case.

“Until today I have kept my defense in reserve, because I considered that it was the best way to protect [Colombia’s political] institutions,” Fajardo stated in his Bogota press conference.

However, the Controller-General, certain powerful Colombian politicians and former Colombian President Cesar Gaviria together “are playing a nefarious game” by using the Hidroituango case to block Fajardo’s presidential candidacy, according to Fajardo.

“That is corruption and dishonesty,” he charged.

“In one way or another, the [Inter-American Commission on Human Rights] judges now have to review the manifest illegalities and inconsistencies” in the Hidroituango case, he said, citing his new complaint being brought before the Commission.

“Despite all my attempts to maintain this [Colombia presidential candidacy] process in the legal field, it has been the Controller himself who has taken it upon himself to bring it to the political arena.

“A few months ago, the journalist María Jimena Duzán confirmed to me that since 2016 there has been a coordinated, planned attack. She told me, ‘they want to screw Fajardo,’ and this is associated with the Toga Cartel [a popularized name for certain corrupt Colombian justices].

“Carlos Felipe Córdoba is not a Controller, he is a political record. He was the right hand of [former Colombia Vice-President and former Presidential candidate] Germán Vargas Lleras in the last elections and has the support of his fellow countryman from Pereira, [former Colombia President and Liberal Party Leader] César Gaviria Trujillo.

“His obedience was already put to the test in 2017 when, as an auditor, he presented false and illegal reports, without having any competence, pretending to show that in my [former Antioquia] governorship I had paid favors to donors of my campaign with contracts. Every [charge] fell apart and Mr. Córdoba never responded for his slander.

“He is the same politician who was a militant of the Uribista youth, Vargas Lleras's private secretary, and who appointed the prosecutor's wife as delegate comptroller.

“Apart from these political backdrops, the [Hidroituango damages-claims] process has been plagued with unusual irregularities that I am highlighting today before public opinion.

“First, Juan Carlos Calderón España, under the guise of a ‘citizen overseer,’ allowed the Controller General to initiate an exceptional control in the Hidroituango case. The supposed citizen and overseer concerned about the public interest is a personal friend of Carlos Felipe Córdoba and a month before requesting exceptional control over Hidroituango, he declared in the Council of State in favor of his appointment as Controller.

“And, oh surprise, in the same month he released his book, "The Overseer, Social Control, Media and Democracy," with a foreword by guess who: the same Controller he defended in the Council of State. Added to this are family contacts in the Controller's Office, and other evidence that was erased but that we rescued. All these are pieces of the puzzle that they have been putting together for years to eliminate us legally and politically.

“Second, the Controller's Office changed the initial accusation against me. After an alleged and arduous investigation in which he invested time and resources, I was accused of only one conduct: not exercising control [over Hidroituango]. I provided clear and compelling evidence. This is where the case should have gone. However, the surprise was greater when all that investigation did not matter, they quickly changed the document and I ended up being charged with several different behaviors.

“They reproach my government for having agreed with the construction of a third [Hidroituango diversion] tunnel. But the Controller's Office lies when it says that the EPM advisory board contraindicated it. The Controller's Office refused to read the documents in full, refused to listen to the advisory board.

“For those lies, the person who convicted me, Juliana Velasco Gregory, is being investigated by the Judicial Discipline Commission. Other issues such as the lack of fines [imposed upon] EPM or the impossible guarantees of [construction project] acceleration or change of designs by the Board of Directors are tricks in the motivation of a conviction against me.

“Third, Córdoba appointed those who should decide [culpability] in the second instance. Here another key name appears in this whole mess: Cristian Castro, Anticorruption Delegate Controller.

“Castro was appointed [prosecution coordinator], but after a press article exposing his political ties, he was removed from the case and even went on vacation. What impartiality can a person have who is César Gaviria's minion, was secretary general of the Liberal Party in Pereira, is the political godson of Carlos Humberto Isaza, who was the Director of the Public Function of Cesar Gaviria and is today a contractor of the Comptroller's Office?

“And as if that were not enough, just a couple of days ago, a day after the second instance ruling was known, Castro shared on his personal Instagram account a meme attacking me directly using Yanfri, the boy who became famous in [social-media] networks for his walk.

“Textually the meme says: ‘Hey Yanfri, why are you walking like this all beautiful, hombe? The Controller's Office confirms that Fajardo is responsible for the detriment of COP$4.3 trillion in HidroItuango.’

“As I have repeated on several occasions, the [political opponents] no longer even hide. They do not care about the [Hidroituango] project, nor [admit] that there is insurance [covering the Hidroituango damages], nor the risk for the Ituango community [living downstream of the Hidroituango dam].

“They needed to blame me, they fear a change of power to a government in which hiring [political hacks] is not a booty.

“Colombia has to change. The supervision, control and inspection has to shine for everyone. Today the credibility of these institutions is on the floor. Justly.

“The capacity to investigate is low, the [investigation process] times are not reasonable, the impartiality is in doubt. The investigations are selective, and they become torture for millions of Colombians -- and that must change.

“I reiterate, there are many good people in the Prosecutor's Office, the Attorney General's Office, the Controller's Office, the control and surveillance entities, but the scaffolding today favors power and money. And that has to change.

“I believe in an independent justice where the force of reason prevails, and not the force of power and arbitrariness. I believe in sober justice. I reject these characters who debase public service.

“It is infamous to be singled out by a prosecutor who believes that he could have predicted the volatility of the dollar [in a separate, earlier case brought against Fajardo over an alleged exchange-rate error in calculating the cost of a public contract] , by a Controller who has spent years trying to convict me in any way.

“I am going to give this fight because I have the peace of mind that 22 years of public life give me, by acting correctly. I know very well who I face in this unequal struggle, but there is no alternative: that's how we started and that's how we continue.

“I would like to close by saying what I have repeated for many years: truth and decency always come out ahead, even if they sometimes take time.”


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About Medellin Herald

Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

Medellin Herald welcomes your editorial contributions, comments and story-idea suggestions. Send us a message using the "contact" section.

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