Company News Jul 14, 2021 4:14 PM
The Governor’s Office of Antioquia proposed selling its participation in the hydroelectric power plant in exchange for a part of EPM.
The company will analyze and discuss the proposal at EPM’s Board of Directors before the end of the month, La Republica reported.
Acting governor of Antioquia, Luis Fernando Suarez Velez, explained that this proposal is to avoid a “prolonged and damaging judicial conflict”.
Suarez explained that another reason for the decision is the protection of public assets by remaining 100% public.
“We want to strengthen EPM’s presence in the regions. The most important thing is that there are already arbitration lawsuits filed by Hidroituango against EPM, for non-compliance in some of the milestones of the Boomt contract (build-own-operate-maintain-transfer). We can save time and resources in that process,” Suarez said.
Luis Pérez, former governor of Antioquia, said that the proposal is excellent considering that the project has construction errors that EPM will have to assume in the future.
“EPM is already subject to billions of dollars in penalties that could lead to disputes between the Governor’s Office and the Mayor’s Office for many billions and damage relations in the region,” Perez said.
Perez said that if EPM does not own the partnership, as a contractor it will have to assume losses close to CoP$10T.
“The business can be done without the need for them to give a percentage of the company to the department, but rather two or three hydroelectric plants could be a good option. That could open the way to create the Empresas Públicas de Antioquia (EPA),” Perez highlighted.
Mayor of Medellín, Daniel Quintero, said that EPM’s Board of Directors created discussion tables for this alternative.
The Board of Directors will evaluate possible revenue of the operation and conditions, and then, make a possible valuation process.
Bottom-Line: EPM faces a difficult situation due to its corporate crisis and the huge problems of Hidroituango.
It seems like the government of Antioquia wants to leverage this situation to keep a part of EPM, but adding more politics to the firm could increase its corporate crisis.