Venezuelan Rum Maker Optimistic About Economic Recovery

Rum distiller Ron Santa Teresa has launched Venezuela's first public share offering in 11 years, saying that the nation may see an economic transition similar to China.

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One of Venezuela's best-known brands, Santa Teresa, which exports via an alliance with Bermuda-based Bacardi Ltd., sold an initial 1 million shares on Friday.

It was the firm's first in a series of offers of bolivar-denominated shares hoped to raise the equivalent of a modest US$3 million this year.

Company president Alberto Vollmer compared the sale, the first public share offering since 2008 on the Caracas bourse, to the re-opening of the Shanghai Stock Exchange 30 years ago that helped revive China's economy.

Another Venezuelan company, real estate developer Fondo de Valores Inmobiliarios (FIV), also plans a share issue this year, according to its president, Horacio Velutini.

The two men belong to an informal group known as "Optimists Anonymous" made up of 39 corporate leaders, bankers, and investors who think businesses will become profitable again as President Nicolas Maduro appears to be on the path of opening the country's market.

Last year, the government unexpectedly relaxed 15 years of economic regulations, to face the consequences of illegal sanctions against Venezuela.

Vollmer led a ceremony at a Caracas roof bar on Friday, where attendants toasted with glasses of rum, to celebrate the sale of shares that will finance the expansion of warehouses and the acquisition of new barrels to age their spirits.

Investors included Venezuelans living in the country and abroad.

Velutini said his real estate group plans to use the proceeds of its planned share sale to buy up office space in Caracas, which he says is looking cheap.

Vollmer and Velutini say members of "Optimists Anonymous" have met U.S. authorities to discuss how Washington's sanctions have affected private sector businesses.

Those sanctions prevent U.S. firms from doing business with Venezuela's government and state-run companies but do not explicitly block commerce between private companies.

However, Venezuelan businesses say that in practice, overzealous compliance of sanctions often hamstrings their operations, and measures such as prohibiting direct flights between the two countries have boosted operating costs.

But the State Department, in response to questions, said the United States was using sanctions to support a "transition to free and fair presidential elections."