Access journalism, done right: The Serafino Iacono case

Tommy Humphreys of CEO.ca traveled in Colombia with Frank Giustra and Serafino Iacono. He got rare face time with Iacono, who as chairman of Pacific Rubiales Corp. and a group of mining and infrastructure companies is a particularly alluring subject for media scrutiny. The article is basically positive and ever-so-cheery (“Net net, the future is bright for Colombia, and Fino and Frank’s Blue Pacific is moving along at a rapid pace.” Fino and Frank? Really? And net net? WTF) but heck, there is a place for this stuff. There’s no harm in hearing the founders of a bunch of companies, giving us their pitch. Sure, the pitch is not very heavy on content, but it’s ok, it gives you some sense of how Iacono and Giustra have done well in Colombia.

What makes this article fun are the subtle digs. Like this one. 

“Colombia is the longest standing democracy in South America,” Fino tells me, his ever-present security detail hovering ominously at our periphery. “I never feel like I’m in danger here.”

Love it. Isn’t Colombia’s tourism slogan, “The only risk is not being able to afford 24-7 personal protection”?  (Speaking of these guys and that slogan, here is a really fantastic article called The Only Risk Is Wanting to Stay.)

Iacono saw opportunity in the Colombian raw materials sector before anyone else. This is why he’s one of the country’s most successful entrepreneurs today — one who has, for example, Colombian presidents both past and present on speed dial.

But, but, didn’t you just say it was a democracy? How does a Venezuelan working for a Canadian company get more access to the president than almost any Colombian citizen? Ha, don’t answer that.

Blue Pacific — Iacono and Giustra’s private company led by Jaime Perez Branger — owns ports under construction in Cartagena and Barranquilla, as well as power plants, farms, mines, and other infrastructure assets scattered across the country….

“In the resource business, you have to look at the related businesses of each of these commodities.” Fino tells his guests over whisky with coconut water one night. “The other products and materials used in production, the infrastructure…”

Isn’t that just the question? How much does Iacono’s private company sell to the publicly traded companies (that would be you, Mr. retail shareholder), and at what prices? Luckily we have the public disclosures, which all tell us that the PRE.to pays its related parties for office space, electricity and transport, and not to worry, a board committee has ensured that PRE.to is paying fair market value in these deals.

 Of all the companies in Frank and Fino’s portfolio, Petroamerica Oil Corp. (TSXV:PTA) is the one they’re most excited about. “There’s a huge opportunity for Petroamerica to be the consolidator of light oil projects in Colombia,” Fino says. “CEO Nelson [Navarette] is the top oil executive in Colombia, with the best connections in the country. This is the next Pacific Rubiales.”

Frank and Fino are two of the largest holders of PTA shares, last at 32 cents.

Part of the humour here comes from where they call it “the next Pacific Rubiales.” Obviously they are referring to that company’s 10-fold stock price gain from 2009 to 2011. But there’s another reading:

Hmm.

The other bit of humour here comes from the dual nature of the second paragraph: Disclosure or explanation? You be the judge.

Anyway, good article. It made me smile. Take a read if you wish.