| Q-1: Mr. Pescarmona, IMPSA is today a worldwide operating holding with its roots in Argentina. Can you tell our readers a little more about the origins of the Pescarmona family in Mendoza and the development of IMPSA?
A-1: The holding started as a family company. My grandfather founded it in the year 1907. Then, my father continued with it. I represent the third generation of the company. We started as a metallurgical company. Afterwards, we entered to other businesses like telecommunications, insurance and wines. IMPSA is represented by a group of companies. We employ 7,000 people. One quarter of these employees are in Argentina and the rest are working on other parts of the world like Brazil, Colombia, Malaysia, etc.
Q-2: Did the core business change in your opinion?
A-2: Our core business is based on knowing how to sell key core businesses. We are a technological group. We also know how to gain our employee’s commitment to the company and how to sell large amounts of products. We are not part of the consumer market, except for Lagarde (winery), that is a small company. If you want to sell this kind of products, you need to reach a big public or target. Usually, we know how to sell a large amount of products.
Q-3: Why did IMPSA enter the telecommunication market? Did you meet the expectations you had in the very beginning?
A-3: We saw an opportunity to develop an idea I had with one of my partners and with Mr. Ricardo Verdaguer. Then, when we started with IMPSAT, the telecommunication market was pretty virgin in Argentina. We adapted the same business model to each country. Today, IMPSAT is the only Telecommunication Company that is placed throughout America. We learnt about the data transmission market. We also know how to sell links and other values. We have a strong infrastructure. Our fiber optic infrastructure is the best of all Latin America. We connect Bello Horizonte, Rio de Janeiro, Buenos Aires, Cordoba, Mendoza, Rosario and Santiago. We have a lot of clients and we sell this capacity to other telecommunication operators like Global Crossing, Nextel, Fibertel, etc.
Q-4: Which are your main clients in the telecommunication market?
A-4: We have 2,800 corporate clients throughout the region. We have the best clients of Latin America. IMPSA is very proud of them and with the way we serve them. We are a telecommunication company that provides data transmission services to our clients and we also sell part of our infrastructure to other carriers. We have invested more than 1 billion dollars in the region.
Q-5: IMPSAT shares are also traded in Madrid. What are your expectations regarding attracting European investors?
A-5: We think that Madrid used to be a very good market for the European investors. Those businessmen might be interested in a player like IMPSAT that has a strong presence in the entire region. There are other companies like Telefonica that is in Argentina, Brazil and Chile but is not in Colombia, Venezuela, Mexico or the United States were we are also present. We are focused in the data transmission services, which are very different from the mobile phones services. Above all, it has to be said that the company grew 41% despite the economic crisis that Argentina was passing through and this year we are going to grow also.
Q-6: What do you foresee for the future of Internet in Latin America?
A-6: I think that Internet and the new economy are here to stay. Internet is going to be a good business here.
Q-7: IMPSA adopted a financial strategy, which focuses on a wide approach to the international bonds market, rather than to the local financial market. Can you tell us a little more about the shareholders structure of IMPSA?
A-7: We have different partners for all the businesses that we are developing. We think that this is good for us, for our management and for the accounting department. IMPSA is also an important player in the car industry. We have a French partner, Libonal, which has 20% of the shares in TCA. We have three factories. One is in San Juan, Argentina, and the other two are in Brazil in Recife and Curitiba. We have several partners in the telecommunications sector. They are Morgan Stanley, British Telecom and Sudamericana, Colombia and British Swiss First Boston. Then, 13% of the company is traded in the NASDAQ. The remaining 46% are part of Mr. Verdaguer, Mr. Vivo and me.
| Q-8: IMPSA has as well a strong presence in the Far East. On the Philippines for instance, you just signed an agreement on the biggest investment project of IMPSA’s history. How exactly is this project financed?
A-8: We have a nice project in Philippines where we have invested 460 million dollars. IMPSA owns 50% of the shares and a Company in California (Edison Mision Energy - EME) holds the other 50%. This project is based on the building of three power stations of 750 megabytes. One of them will have 20 megabytes, the other 30 and the last one is going to have approximately 700 megabytes. This is the biggest foreign investment in Philippines. Our project is financed by a group of banks. There are four banks: Societe Generale, BNP, IBJ (Industrial Bank of Japan) and another bank form Japan. Each bank has a specific role. Then, there are another 16 banks that follow these four leading banks.
Q-9: How did you convince the banks to invest in a high-risk project, as it will be developed in a politically very unstable region?
A-9: We have so many things that convinced not only the banks but also the insurance companies. The political and the commercial risks of this project are covered by a group of insurance companies that are the most important of all over the world. Our project has an insurance value of 560 million dollars. This is a record of the private insurance. We are very proud of it. I think that we convince them because they thought the project was good. They also believed that the possibility of getting repaid was very good. We got a performance undertaking that means that we are going to sell the energy to a state company called NAPOCOL (Nathonal Power Corporation).
Q-10: IMPSA is also working in other countries of the Far East but also in countries like Turkey and Switzerland. How do you choose the destinations of the company’s investments?
A-10: Well, we look at the project first. If we think that the country has not so many risks, then we go there. There are certain countries that I do not mention. So we do not go there even if they offer us money. I will not say which are those countries.
Q-11: And your activities in Brazil, for example?
A-11: We have big projects in Brazil. We employ more than 2,000 people there. The telecommunication sector and the car industry are very good in Brazil. We are also developing some hydro energy projects.
Q-12: Is the hydroelectric plant in Misiones actually a project that focuses the Brazilian market?
A-12: This is a very big project. We are the leaders of a consortium of companies that are developing this project with us. We are building a plant of 3,000 megabytes. Then, we will sell the energy to Brazil.
Q-13: Mr. Pescarmona, regarding your future plans for IMPSA, could you point out the most important investments?
A-13: Well, I should not talk about my future projects because maybe the competition is going to know about them. We are doing a couple of projects that are also part of the new technology market. One is very advanced and is called CITRAC. CITRAC is a logistic project for Internet. A truck owner can use the Internet to know where is the vehicle placed. This technology can provide you extra information like the speed of the truck, etc. If the truck owner has business smart phone or a mobile phone connected to Internet, he can also know where they are.
Q-14: Do you consider Argentina, although it is still in a deep economic crisis, a profitable destination for foreign investments?
A-14: Argentina is not going to devaluate its currency. The Argentinean economy is not going to do default. The economy is going to be better very soon.
NOTE: World Investment News Ltd cannot be held responsible for the content of unedited transcriptions.
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