ECP acquires ISA

Company News    Aug 12, 2021 3:15 PM

Ecopetrol (NYSE: EC) announced the acquisition of 51.4% of Interconexión Eléctrica S.A. ESP (ISA).

The NOC announced the purchase from the Nation, which holds that stake in the company through the Ministry of Finance (MinHacienda).

“An inter-administrative share purchase and sale agreement was signed with MinHacienda, through which the company acquires 569,472,561 shares of ISA, equivalent to 51.4% of the outstanding shares and which represented 100% of MinHacienda’s ownership in the company,” explained ECP.

Ecopetrol said that the agreed price per share was CoP$25,000, so more than CoP$14T was paid in this transaction.

The agreement was finalized after two years of work on the project, during which a rigorous analysis and evaluation of the business opportunity was developed, according to the NOC.

“As of today, the necessary steps will be taken to close the transaction,” ECP added.

The firm said this investment will allow it to take a step in energy transition it is undertaking, on its path to decarbonization.

“This agreement will generate benefits for both companies, for the Nation and for Colombians, as the country maintains its shareholding in both firms,” ECP said.

The agreement makes Ecopetrol a leading energy transition conglomerate in the Western Hemisphere, integrating hydrocarbon value chain businesses with power transmission, renewables, infrastructure and nature-based solutions.

Bottom-Line: Without a doubt, this is “the deal of the year” for the government. The authorities were able to get most of the resources needed to cover the fiscal gap, thanks to this transaction.

It is important to recall that Fitch said that this deal could be negative for ISA.

Also this transaction could affect ECP’s plans for becoming a new energy generator, as Colombian law apparently prevents transmission companies from being generators.

The government should clarify this situation; it could be a relevant issue…

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