Carbostar: To sell or not to sell? That is the question

The Morales couple, Carlos and Mar a, and Andr s C rdoba, shareholders of the twenty-year old Colombian mining company Carbostar, wanted to step down from the day-to-day management of the company in March 2018. To do so, they considered three options: selling the entire Company to Carbones de Panam ; partnering with Carbones Julius, which was willing to buy 45% of the shares as long as the founders participated in an aggressive expansion plan by increasing debt; or selling 60% of the shares to Maklan, a coal producer and supplier of heavy machinery in the industry, which could accept a generous dividend policy given its financial muscle. As the majority shareholder (with 75% of the shares), Carlos Morales was not convinced about allowing third parties to manage the company he had founded. He secretly longed for one of his children to take over the company in the future. His wife Mar a (Andr s' sister) held 12.5% of the shares. Her interests lay in receiving an income from the business and she had no preconceived ideas on whether it was convenient to open up to third parties. Andr s C rdoba held the remai ning 12.5% of the shares. He was interested in creating a family office with the resources from the total or partial sale of Carbostar. As the financial expert of the group, he was responsible for advising his partners on their course of action. Andr s' challenge, which will be the task for students, is to find the option that best balances the disparate interests of his partners. Universidad de Los Andes' case collection.