GEB and Enel agreement: an update

Company News    Jun 25, 2021 4:11 PM

Grupo de Energia de Bogota (GEB) and Enel Américas reached an agreement that will redefine the participation in Emgesa and Codensa. This will be presented at a Shareholders’ Meeting on June 28th.

The companies announced an agreement that seeks to settle differences over dividend distribution and their operations, La Republica reported.

The cross-border merger will be by absorption, in which Emgesa will absorb Codensa, Enel Green Power and Essa Chile.

The new company will be called Enel Colombia, and GEB will control 42.515%. Enel will hold 57.3% of the shares of this company.

“This new company will be 22.9% more profitable by 2025. GEB will receive additional CoP$185B per year due to the new dividend distribution policy and the distribution of retained dividends,” the group highlighted.

One of the main benefits of the agreement is that it will bring the Group’s participation as a strategic partner in the company, which will be larger and have much greater growth potential.

In addition, BTG Pactual expects this new company to reach 5,470MW of installed capacity by 2025; 56% more than current figures, Valora Analitik reported.

Enel Colombia could have an equity value of US$10B, 20% more than Emgesa and Codensa combined.

BTG Pactual explained that GEB will reduce its total stake by 8%, from 51.3% to 42.51% in Enel Colombia, as the Enel Group will contribute US$580M in cash, Enel Green Power’s current assets in Colombia and the Essa 2 power plants in Central America.

GEB projects that the new company should increase its EBITDA and profit generation by 25.1 % and 22.9 % respectively by 2025. This demonstrates strong growth opportunities, with new unconventional renewable energy projects in the next four years.

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