CAF, CFN and Banco de Guayaquil set up “Fondo País Ecuador”

On Tuesday, July 13, a presentation was given of “Fondo País Ecuador,” an initiative of the Andean Development Corporation (CAF), the Corporación Financiera Nacional (CFN), and Grupo Financiero Banco de Guayaquil. The event, which was held in a well-known hotel in Quito, was attended by the President of the Republic, Lucio Gutiérrez, and Enrique García, executive president of the CAF.

“Fondo País Ecuador” is a collective fund that will focus investing its resources in contributions to equity (purchase of convertible bonds) in selected companies offering prospects of high returns and that engage in business in sectors specified by the Fund. It will have an initial capital of eight million dollars, with the CNF contributing 5 million, the CAF 2 million, and Banco de Guayaquil 1 million. The Fund will be administered by Administradora de Fondos de Inversión y Fideicomisos BG S.A., and technical advisory services will be provided by MerchantBansa S.A.

The Fund envisages the participation of new institutional investors that will permit its capital to reach twenty million dollars, the maximum allowed.

Investments will be medium- and long-term in private companies that have been duly evaluated and qualified by the Fund on the terms specified in its investment policies, and key features of its operations will be their total transparency and the Fund’s participative role in the top management of the companies selected.

“Fondo País Ecuador” will be governed by the laws that are applicable to Ecuador’s Stock Market and its own bylaws contained in the Regulation that created the Fund and it will have an estimated life of ten years. The main restrictions on the Fund’s operations are:

The sectors that have been pre-selected as potential beneficiaries of the Fund’s resources are:

The main advantages for a company that obtains financing from “Fondo País Ecuador” will be:

Diversification of its sources of financing by obtaining access to medium-term equity type funding.

1.-Having representatives of the Fund on its board of directors, as a result of which it will be able to count on professionals with ample experience in business management to advise it on running the business.

2.-By increasing its equity, the company will improve its financial leverage and access to credit.

3.-Having the Fund as a shareholder, thus enhancing the company’s image and consequently its negotiating position when doing business.

The Fund’s administrator and legal representative will be Dr. Juan Carlos Arjona, General Manager of Administradora de Fondos y Fidecomisos BG. (Phone: (593-4) 251 8555, Ext. 2205; e-mail: fondopais@bankguay.com)