| Project description |
| The project involves supporting Covinoc S.A. (“Covinoc” or the “Company”), a Colombian company specialized in the recovery of nonperforming assets within the financial system, in growing its capacity to administer loan and other financial assets portfolios, contributing this way to Colombia’s financial market development. |
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| Project sponsor and major shareholders of project company |
Covinoc has, for more than 50 years, provided recovery and portfolio management services to financial intermediaries in Colombia.
Shareholder Composition:
Inversiones La Costa: 21.78%
Delta Asociates J.C.: 11.60%
Lantro S.A.: 22.31%
Ircanda S.A.: 22.31%
ARIGU y Cia. C.S.A.: 20.00%
Nicolas Gomez y Compaņia: 1.00%
Nicolas Gomez Nieto: 1.00% |
| Total project cost and amount and nature of IFC's investment |
| The proposed investment consists of an equity investment in common shares for up to US$5 million earmarked at strengthening Covinoc’s ability to administer pools of non-performing assets. This investment is expected to assist the Company in the implementation of the growth plan put forth by its management and shareholders. |
| Location of project and description of site |
| Covinoc is headquartered in Bogota, Colombia. The company has offices in 14 cities of the country, allowing it to have a national operational coverage. |
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| Anticipated development impact of the project |
| IFC’s involvement in this project would allow it to positively impact the market place by building capacity in Colombia’s financial market. The project is expected to increase the ability of financial intermediaries in the country to offload their assets, particularly non-performing ones, improve liquidity and devote these resources to originate new transactions, increasing this way their offer of credit. |
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| IFC's expected development contribution |
IFC’s investment in Covinoc is expected to further develop the distressed asset resolution market potentially resulting in high developmental impact at different layers:
Increase financial institutions’ ability to outsource the resolution of non-performing assets.
Aid to develop secondary debt markets, while promoting international best practices in terms of collections and distress assets resolutions.
Encourage international insolvency standards and creditors' rights. |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. This project involves IFC support for investment in portfolios of non-performing assets, and considering the nature of activities supported, the project will be required to:
Develop a Social & Environmental Management System (SEMS)/procedure relevant to its business process, prior to disbursement, that is satisfactory to IFC, to ensure that all investments are screened and processed to identify environmental and social risks, if any, and to ensure that acquired portfolios with potential environmental risk do not have subprojects on the IFC FI Exclusion List or subprojects that have substantial unresolved social or environmental issues;
Nominate an environmental officer prior to disbursement
Ensure that investee organizations managing the assets have a SEMS/procedure relevant to their business process that is satisfactory to IFC, to ensure that the loans are operating in compliance with the Exclusion List and Applicable National Environmental and Social Laws and regulations, or have an action plan to achieve the same within a reasonable time frame;
Submit a periodic report to IFC as per a format to be provided by IFC
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| For inquiries about the project, contact: |
John Jairo Aristizabal
President
Calle 19 No. 7-48 piso 2
Bogota, Colombia
Telephone: +57 1 353 4309
Fax: +571 286 2239 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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