Colombia’s Pacific Infrastructure Inc. is targeting the Toronto Stock Exchange for a $250-million initial public offering this fall to finance an oil pipeline and export terminal in Cartagena.

But while the company’s focus for raising equity capital is on the proven Toronto market, it also plans to follow with a listing on the Bolsa de Valores de Colombia – the South American country’s principal stock exchange – to broaden the shareholder base and build support for its project at home.

“We’ll follow the steps of our forefathers – we’ll first go to Toronto, and then for a second call, we’ll do the IPO in Bogota,” Pacific Infrastructure chief executive officer Juan Ricardo Noero said in an interview.

“Other than being a vehicle for raising capital, the BVC is a vehicle for being well received and well perceived by local authorities. And the Colombian government fosters and encourages that.”

The BVC is a small but fast-growing source of capital for Colombian companies that have traditionally had to look abroad for equity financing. It is pursuing an aggressive international strategy to sustain its growth and, at the same time, aiming to give Colombians a bigger ownership stake in their economy.

The exchange has announced a merger with its counterpart in Peru, in which each exchange will continue to operate separately. It is awaiting regulatory and shareholder approval to consummate the deal.

The BVC is also working with Lima and Santiago, Chile, to integrate cross-border trading operations. And it is keen to pursue dual listings with the TSX, which is in the middle of its own fight over its merger plan.

“The Colombian market has done extremely well,” BVC president Juan Pablo Cordoba said after one of the exchange’s largest IPOs last week. Since 2003, the market capitalization of BVC-listed companies has grown by 10 times, while trading volumes are up 15 times.

“To continue growing, we need to have further integration with global capital market. … We can all benefit from pulling together,” Mr. Cordoba said.

He said integration with Lima and Santiago will create a “virtuous circle” – more liquidity will bring more investors, more investors will encourage more companies to list, and more listings will enhance liquidity and trading volumes.

But Mr. Cordoba insisted the integration will do nothing to diminish the Colombian flavour of the Bogota exchange, a nationalist perspective that is critical in the “democratization” of equity markets that the BVC is vigorously pursuing.

The Bogota exchange had two IPOs last week of high-profile Colombia companies: a $250-million (U.S.) listing by the airline AviancaTaca Holdings, and a $1.1-billion IPO by Grupo Aval, Colombia’s largest banking conglomerate.

Both stock sales were oversubscribed.

The exchange proudly notes that 40 per cent of its volume comes from retail investors, and it has 17 trading rooms across the country where individuals can not only trade stocks and bonds but attend free courses. Some 500,000 individual shareholders took part in its biggest IPO to date, the $2.6-billion (U.S.) offering in 2007 from state-owned oil company, Ecopetrol S.A.

Mr. Cordoba said the BVC is also keen to work with the TSX to promote dual listings in order to increase the shareholder base and liquidity for companies operating in Colombia.

So far, there are three dual-listed companies: Ecopetrol and Pacific Rubiales Energy Corp., which trade on the TSX, and Canacol Energy Ltd., which is listed on the TSX Venture exchange as well as the BVC.

“The case for dual-listing with Toronto really has to make sense to the issuer, from the point of view of adding liquidity for the issuer,” Mr. Cordoba said.

The TSX is working with the Bogota exchange to facilitate those ties, and two Toronto officials were in Colombia last week meeting with BVC counterparts and companies interested in listing in Canada.

“In any market we go in, we always develop very good relationships with the local stock markets,” said Janis Koyanagi, vice-president of business development and strategy with the TSX.

“We believe it is a collaborative relationship, not necessarily a competitive relationship because our market strengths are so different.”

Pacific Rubiales is incorporated in Toronto and listed on the TSX, but all its executives live in Bogota and all of its producing oil and gas properties are in Colombia. The company was the first “foreign” corporation listed on the BVC, and accounted for 25 per cent of its trading volume in the first quarter of 2011.

Chief executive officer Jose Francisco Arata said natural resource companies operating in Colombia will continue to rely on the TSX for their public financing, describing Toronto as the leading capital market in the world for oil and gas and mining sectors.

But he also stressed the importance of having a presence on the Colombia exchange. For one thing, it diversifies the shareholder base – some 12 per cent of Rubiales’ shareholders are Colombian. But it is also a question of assuming a leadership role in the domestic marketplace.

“We live here and we have a constant relationship with not only the government but the wider community,” Mr. Arata said. “And there is a huge appetite for this kind of company to participate in the local market.”

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