Energy Jul 22, 2021 5:15 PM
EPM wants to sell its participation in these companies.
The company requested the Mayor’s Office of Medellin to submit to the Municipal Council a Draft Agreement to authorize EPM to sell its non-controlling interest in UNE and Inversiones Telco (Invertelco), La Republica reported.
EPM wants to redirect the economic resources obtained to initiatives that it manages directly and that are part of its business portfolio. The company could effectively meet the commitments acquired in the 2021-2023 Investment Plan for CoP$11.2T.
EPM plans to use internal generation of funds and an alternative source to the capital market, which could be the resources from the disposal of the shares in UNE and Invertelco, in case the Medellin Council authorizes such sale.
“With this decision, EPM wins and the country wins. It strengthens the company financially by allowing substantial resources invested in the telecommunications business to be redirected to the Group’s strategic businesses and projects,” EPM’s Jorge Carrillo said.
He said that these resources will be used to complete the Hidroituango power plant, which will generate 17% of the energy needed by the country, and will provide EPM with revenues of between CoP$1.5T and CoP$1.7T per year.
Bottom-Line: EPM announced the Hidroituango cost overruns recently, and is now looking for resources to cover this cost overrun.
The company needs the resources quickly and the sale of non-strategic assets is the best alternative to get them, without resorting to new debt.