Aval yourself warily

12 September 2014 By Martin Hutchinson, Christopher Swann

Grupo Aval wants to raise $1.1 bln on the NYSE. It earns better returns than most U.S. banks and operates in Latin America’s fastest-growing economy. But dual-class shares give its founder near-total control. And the lender’s using the proceeds to boost capital, sapping earnings.

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Grupo Aval, Colombia’s largest banking group, filed with the U.S. Securities and Exchange Commission on Sept. 8 to raise $1.1 billion in an initial public offering in the United States.

The banking group is already listed in Colombia and is controlled by its founder Luis Carlos Sarmiento Angulo, Colombia’s richest man. He held 95.9 percent of the company’s outstanding common shares and 60.8 percent of the preferred shares as of Sept. 4, 2014.

The company said in an amended filing that it expects the offering of 73.5 million American Depositary Shares (ADSs) to be priced at $14.96 each.

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