Colombia

"It took a disaster of historic proportions to end the crisis. In mid50 November 1985 the volcano Nevado del Ruiz erupted for the first time in nearly 150 years, spewing ash and lava from its 5,ooo-metre summit. Towns and villages were buried beneath ash and mud, and rescue efforts were hampered by fallen bridges and impassable roads. Literally overnight the impasse over entry permits vanished. Instead of barring the Sealand choppers, Colombia pleaded for them to assist in search-and-rescue operations, and for two weeks Sealand craft and crews worked around the clock delivering food and tents to survivors in remote villages and ferrying others to safety. Even with these efforts, assisted by contributions from other countries, thousands of Colombians lost their lives in the eruption."

"1992Media Capital SGPS in Lisbon, a corporate group of magazines and broadcasting stations, is sold to Nicolas Berggruen for 29 million dollars. Apparently, the first media company of Portugal, founded in 1988, ran into difficulties and needed a cash injection. As is often the case in practice, such capitalization leads to the loss of independence. The investor becomes the boss. In industry circles, there is speculation that the deal in Lisbon was initiated by the Domingos. Having already owned a media conglomerate in South America, which included among others the most listened-to radio stations in Colombia, they wanted to expand their empire to Europe. The entire Spanish-speaking world was to belong to the Domingo family. At that time, Nicolas Berggruen was still relatively unknown in the investment market; he could discreetly set in motion the Domingos' assault on the media landscape of Portugal and Spain."

"We made our first foray in 2019 when we acquired a majority stake in the bankrupt Colombian telecoms company Avantel, merged it with a vehicle that we had used to buy Colombian mobile telecoms spectrum, and renamed the whole operation WOM Colombia. We then set about investing in infrastructure projects in Colombia over the next five years. Following a bandwidth auction, we won 20 MHz in the 700 MHz spectrum and 30 MHz in the 2,500 MHz spectrum. We then invested in building WOM Colombia’s network, installing more than 8,000 antennae and 3,000 additional towers, and created 2,500 direct and more than 5,000 indirect jobs, with an average age of 32 for recruits. We were probably Colombia’s largest recruiter, opening 147 stores in one year alone. Altogether, we have invested $1 billion of equity in WOM Colombia. We betted heavily that the strategy that had worked so well in Chile would resonate with customers in the much larger Colombian market. It often surprises Europeans that Colombia is the second largest market in South America, after Brazil but before Argentina and Peru, with an official population of more than 57 million, plus what is reported to be more than 5 million Venezuelans."

"A few years later, the Covid-19 pandemic affected our business much worse than we realised at the time, with the effects taking years to trickle down into the business performance and total investment costs. It was basically a knock-out blow, and both businesses required a total financial reboot to get back on their feet again. At the beginning of 2024, I exited both of my Latin American telecoms investments after being impacted by enormous headwinds. In Chile I secured a full exit at a substantial profit by not taking part in new equity injection by bondholders there. In Colombia I sold my majority holding for a large loss as part of a [Chapter 11](private://read/01kdksn7jhqrm0f2m3d6xxdngv/ch11.xhtml#ch11) capital restructuring. Nevertheless I regard both as successful examples of adventure capitalism in a continent that was entirely new to me. The investments did not end how I had planned, but I learned from the Icelandic crisis and this time decided to draw a line under them rather than wait for the situation to improve as I had done in Iceland. I had learned to recognise a crisis, and ending my involvement was the right thing to do."

"I am not without fault here. There are a few things I should and could have done to make this less painful. The common wisdom was to get a ‘local partner’ to work with in a new country, and I could have taken in a partner at the beginning to share the gain and pain. That was certainly what the bankers advised, but my gut feeling was to build the first company there on our own. I had heard a lot of stories about local partners ripping off foreign investors in Latin America, and in my view that risk was too much to manage on top of the other straightforward business risks inherent in a start-up operation in any country, let alone one in an unfamiliar new place literally on the other side of the planet. But we did look for a partner for Colombia, because by that time we had our own experience and contacts in Latin America, and that was the plan for future countries where we could roll out the WOM concept."

"This way of thinking has become second nature to me. I don’t chase collapse for its own sake: I respect its dangers deeply. But I’ve learned to trust that in the ashes of old systems lie the building blocks of new success. It’s a mindset that has shaped my investments, my strategies and my outlook on life itself. Conversely and importantly, others have found opportunities in some of my failures, like in Colombia. That is the circular way of the world, and just as I can time my entry into failed projects of one kind or another, I too can fail. Often spectacularly so, but that crisis becomes the other side of the coin for another opportunity."