Tecnoglass Inc. (TGLS), a manufacturer of architectural glass, windows, and associated aluminum products for the global commercial and residential construction industries, said that it has reached a joint venture agreement with Saint-Gobain, through the planned purchase of a minority ownership interest in Vidrio Andino, a Colombia-based subsidiary of Saint-Gobain with annualized sales of approximately $100 million.
The company's investment for the minority interest in Vidrio Andino is approximately $45 million, which is expected to be funded with cash of approximately $34 million plus land contributed at an aggregate value of approximately $11 million, Tecnoglass said.
Tecnoglass noted that it intends to fund the cash portion of the transaction with cash on its balance sheet and readily available lines of credit, while maintaining a pro forma net leverage position in line with recent quarters. The transaction is expected to be completed in the second quarter of 2019.
The initial $45 million investment into the joint venture from Tecnoglass will be used to fund a portion of the construction cost for the new manufacturing facility near Barranquilla, which is expected to total approximately $160 million through 2022. The remainder of the construction cost is expected to be funded primarily through operating cash flow from the existing manufacturing facility in Bogota, debt borrowed at the joint venture level and pro-rata capital contributions from the shareholders over the multi-year construction period.
Building on more than 20 years of success, Vidrio Andino also plans to build a new state-of-the-art, technologically-advanced glass manufacturing facility in Galapa (nearby Barranquilla), which is located approximately 12 miles from Tecnoglass' existing production facilities. The new facility will have nominal production capacity of approximately 750 metric tons per day of float glass. It is expected to complete the new Galapa facility in 2021.
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