Colombian travel card company restructures debt

17 June 2020

Colombian firms Mendoza Abogados, Urdaneta, Vélez, Pearl & Abdallah Abogados and Diana Maria Gutiérrez Uribe Insolvencia & Sociedades have helped digital payment company Recaudo Bogotá restructure 372 million Colombian pesos (US$100 million) worth of debt with lenders.

The creditors – HSBC, the IFC and the Export-Import Bank of Korea (Kexim) – turned to local firm Brigard Urrutia for the deal, while Korean technology company LG CNS, which is a sponsor to Recaudo, relied on Posse Herrera Ruiz for the transaction.

Consulting group EDTM Konsultores and logistics company Citymóvil, which are sponsors of Recaudo, are thought to have enlisted Paredes López Asociados, but this could not be confirmed.

The restructuring deal was approved by Colombia’s Superintendency of Corporations (Superintendencia de Sociedades) on 27 May.

The agreement refinances four credit facilities that Recaudo obtained in 2011 and 2012.

The restructuring involved the creation of a new financial model that will allow Recaudo to meet its financial obligations with HSBC, IFC and Kexim. The terms of the existing loans, which are governed under New York law, have also been amended.

Recaudo was created in 2011 to implement a cashless payment system known as SIRCI (Sistema Integrado de Recaudo, Control, Información y Servicio al Usuario) on Bogotá’s transport network. The company was also charged with installing a new fleet of 13,000 buses on the city’s Transmilenio bus network, where passengers could use the contactless travel cards known as Tullave cards. The cards are also accepted on all other transports within the capital’s Integrated Public Transport System (SITP).

Recaudo has had financial difficulties for some time. It filed for voluntary bankruptcy in November 2018, after the company claimed that delays in installing the electronic systems on the city’s transport network left it unable to repay its existing debt. The project was only 70% completed by September 2013, when it was supposed to have been finalised.

The recently approved restructuring deal will allow the company to avoid liquidation and continue to operate its digital payment system, protecting 2,500 jobs. According to local media, the restructuring only provides a short-term solution. Recaudo is thought to be seeking an agreement between the local government and its Transmilenio business that will allow for a long-term solution.

Recaudo won the contract to install SIRCI in Bogotá’s integrated transport network in 2011. The infrastructure project is sponsored by Chilean logistics company Citymóvil and LG CNS, the IT services subsidiary of Korean technology group LG among others. Around 2.4 million passengers use the Transmilenio bus system every day.

Counsel to Recaudo Bogotá

Mendoza Abogados

Partner Mateo Mendoza and associates Daniel José Taboada and Maia Elvira Borrero

Urdaneta, Vélez, Pearl & Abdallah Abogados

Partner Luis Guillermo Vélez

Counsel to HSBC, IFC and Kexim

Brigard Urrutia

Partners Carlos Fradique-Méndez, Carlos Umaña and César Rodríguez, and associates Sergio Téllez, Juan Pablo Tello, Natalia Arango, Paola Guerrero and Sofía Esguerra

Counsel to LG CNS

Posse Herrera Ruiz

Partner Juan Pablo Bonilla

Source: LatinLawyer

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