(Updates stock price in second paragraph.)
Oct. 31 (Bloomberg) -- Cementos Argos SA, Colombia’s biggest cement maker, rose, paring a monthly drop that was spurred by writing down the value of its U.S. holdings and announcing plans to spin off assets to its parent company.
Shares of the Medellin-based company are down 1.5 percent since the end of September. They gained 1.9 percent to 10,740 pesos at the close of trade in Bogota today after earlier dropping as much as 0.4 percent.
Argos reported a third-quarter loss of 44 billion ($23.5 million) pesos on Oct. 27, compared to a profit of 198 billion pesos a year earlier, after the company reduced the value of some of its U.S. assets because of a weaker construction market. Of the company’s $1.4 billion of consolidated revenue during the first nine months of this year, 21 percent was from the U.S., according to a presentation posted on its website.
“Although the company has some good sales volumes in Colombia and the Caribbean, the results weren’t positive because of the impairment in the U.S.,” said Carlos Eduardo Gonzalez, an analyst at brokerage Bolsa y Renta SA in Medellin.
The company’s board said Oct. 26 it is seeking shareholder approval for a plan to spin off assets that aren’t related to cement production, including its investment portfolio, real estate and port assets, to owner Inversiones Argos SA. The parent company would issue preferred shares to Cementos Argos in exchange for the assets, Argos said in a regulatory filing.
“The market may also be interpreting the spinoff as negative even though there’s no real loss of value for shareholders,” Gonzalez said in a phone interview.
Gonzalez said investors are waiting to see how the company responds to allegations by opposition Congressman Ivan Cepeda that it benefitted from illegal land sales.
Cepeda asked the United Nations to pull Argos from its carbon trading program in an Oct. 25 statement, saying the company purchased land in a region where farmers were forced to sell at low prices following a bloody campaign by paramilitary death squads aimed at eradicating suspected guerrilla collaborators.
Argos spokesman Santiago Lopez de Mesa didn’t respond to an e-mail seeking comment. A phone call to his office went unanswered. Company spokesman Juan Pablo Lema, who is on vacation, declined to comment on the allegations in a phone interview last month.
--Editors: Brendan Walsh, Richard Richtmyer
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