Company News Mar 31, 2021 2:45 PM
Ecopetrol’s (NYSE: EC) Felipe Bayón and ISA’s Bernardo Vargas spoke about the ‘deal of the year’ and the implications for both companies.
Bayón told Portafolio that ISA will provide more resilience to ECP to face changes in oil prices.
“ISA is a well-managed company, with excellent financial and operational results, and with low carbon emissions, a key issue in our commitment to decarbonization,” Bayón said.
Vargas said that ISA will add a lot of value to ECP in its organizational work.
“They will analyze how to synchronize the two businesses,” Vargas said.
Bayón explained that there will be independence between the two companies, respecting and maintaining human talent, corporate governance, and administrative autonomy.
Vargas said that ISA will provide all the data required so that they can develop the financial calculations for this process.
“Our concern is to demonstrate that the ISA’s value depends on our people, our corporate governance and administrative autonomy,” Vargas highlighted.
Bayón said that Ecopetrol would achieve a solid and relevant position in energy transmission, a strategic sector for the energy transition.
“The company would position itself, through a single operation, in a key link in the electricity business, with clear prospects for future growth,” Bayón highlighted.
The CEO of ECP said that the possible sale of InterNexa would allow ISA to focus on the energy transmission and road infrastructure businesses.
“Both segments will bring enormous benefits to Ecopetrol as an organization. It is normal for large companies to rotate the portfolio, to sell some assets and buy in others,” Bayón said.
Vargas explained that the decision to sell InterNexa has nothing to do with the process with the Ecopetrol Group.
“This operation is the product of our obligation to manage our portfolio in the best way possible. It is the result of a technical study. The resources will be reinvested,” Vargas said.
Bayón said that ECP plans to invest US$13.5B, mainly in Colombia.
ISA’s investment plan is US$12.5B for the next years, US$3.6B are committed between 2020 and 2024, according to Vargas.
Bottom-Line: It seems like the ‘deal of the year’ is on the right track, which will benefit the government the most.