DJ UPDATE: Venezuela Court: Return Cemento Andino Assets To Argos
(Updates to add comments from analyst, details and stock price) BOGOTA (Dow Jones)--Colombia's largest cement company, Cementos Argos SA (CEMARGOS.BO), can now negotiate with the Venezuelan government for compensation after the expropriation of Venezuelan cement plant Cemento Andino, Argos said Monday.
The assets of the Venezuelan plant, which changed hands a few times in the past three years, have been ruled by Venezuela's Supreme Court of Justice as belonging to Argos.
"Cementos Argos is pleased with this important ruling as it reverts the unfair decision against us," Argos said in a filing to the securities regulator.
Argos expects the Venezuelan government to recognize around $250 million in compensation for the expropriation of its assets including investment, Luis Alberto Velez, Argos chief executive, had said.
Argos, which had already written off the investment, could receive between $45 million to $184 million for Andino, said Jose Fernando Restrepo, analyst at the Medellin-based brokerage Interbolsa.
"The ruling is excellent news for Argos as the court recognizes that Andino belongs to Argos. Now Argos must negotiate with the Venezuelan government to obtain a good compensation for its assets," Restrepo added.
Possible negotiations on Argos' assets come after Cemex SAB de CV (CX), the world's third largest cement maker and Switzerland's Holcim Ltd., took Venezuela to international arbitration to settle its compensation for their expropriated cement assets.
Shares of Cementos Argos fell 1.9% to COP6,380 ($2.49) while the IGBC stock index fell 1.1% at Monday's close.
Venezeulan Simon Ramos was a former owner of the plant. The Venezuelan government seized the assets of the plant from him, declaring he'd failed to pay around $250 million in taxes. The Colombian company then purchased the Venezuelan cement plant in a public auction in 1997, paying $84 million for it.
But March 13, 2006, Ramos was awarded Andino's assets as its former owner.
On Aug. 10, 2007, President Hugo Chavez moved to expropriate Andino's assets after declaring the company "of public utility and social interest," a step needed before seizing the assets.
Monday, the Venezuelan high court ordered that Ramos return Andino's assets to the Colombian company, declaring his previously being awarded the company inadmissable.
Venezuela's high court recognized that Andino belongs to Argos and not to Ramos, Cementos Argos said Monday.
-By Diana Delgado, Dow Jones Newswires; 571-6107044 ext 1132;