Fitch: Stability in Grupo Argos' Credit Rating Following Announcement of Agreement with Grupo Sura

• Fitch Ratings confirmed that no changes are expected in Grupo Argos’ credit rating following the announcement of the spin-off agreement with Grupo Sura, reflecting the company’s robust capital structure, diversified portfolio, and predictable dividend flows.
• The agreement between both companies involves disposing of cross-shareholdings through a transaction known as Spin-off by Absorption, which will be finalized simultaneously.
• This forecast reaffirms confidence in Grupo Argos’ ability to maintain prudent and effective management, continuing to lead the infrastructure industries in which it operates.

Fitch Ratings confirmed that no changes are expected in Grupo Argos’ credit rating following the announcement of the spin-off agreement with Grupo Sura, a strategic move that will enable the company to continue contributing to value creation for its stakeholders. The transaction is subject to approval by shareholder meetings and regulatory entities.

The agreement involves the termination of cross-shareholdings between both companies. As part of the process, Grupo Argos will spin off 197 million shares in Grupo Sura and absorb 286 million shares held by Grupo Sura in Grupo Argos, subsequently canceling them. Grupo Argos will then issue 286 million shares to Grupo Sura’s shareholders, while Grupo Argos shareholders will receive 197 million shares of Grupo Sura. These operations will reduce Grupo Argos’ outstanding shares by approximately 143 million compared to the current figure.

The credit rating agency highlights that Grupo Argos’ credit profile will remain stable, supported by its diversified portfolio and steady dividend flows, with an adjusted debt-to-EBITDA plus dividends leverage ratio below 3x and a conservative capital structure. Fitch estimates that debt will remain close to COP 1.7 trillion by the end of 2024, while recurring dividend flows will ensure financial stability.

The simplification of the shareholding structure and portfolio will become another significant milestone in terms of value creation and transfer for all Grupo Argos shareholders, while preserving the essence of the business philosophy that has characterized the organization.