GEB has the money for ISA

Company News, Regulation & Policy    Feb 5, 2021 2:32 PM

The bid for ISA continues to generate news, this time from Bogotá Energy Group (GEB).

GEB has its binding offer proposal ready to present to the Ministry of Finance (MinHacienda, Portafolio said.

The report said that if proposals of GEB and Ecopetrol (NYSE: EC) are well supported and structured from the operational and financial point of view, the advantage would be on the side of the Bogota conglomerate, since the group already has the CoP$14T ready that the government estimates for the sale.

Ecopetrol would have to wait several months to collect the money, starting with the process raise the necessary equity.

GEB began to study and contact possible banks that would extend credit lines in 2Q20, when the possibility of the government could sell its stake in ISA became known.

The company worked with international banks such as: Bank of America, Citibank, JP Morgan, Goldman Sachs, BBVA, Santander, Sumitomo, Credit Suisse, and BNP.

The banks evaluated GEB’s operational and financial capacity separately and approved the loans for the company.

GEB has four letters of credit ready to choose the type of financing that best suits its interests.

If the Government chooses the GEB offer, after two months it would have the check on the table for the sale of ISA.

GEB would be interested in maintaining ISA’s corporate governance since it is one of the most important assets that the organization has consolidated over the years.

The Bogota conglomerate is willing to sign the “most demanding corporate governance clauses the world has ever thought of”, since its only interest is to maintain two independent public companies, with autonomous and independent Boards of Directors.

Bottom-Line: It seems like GEB’s proposal is very interesting, but this could go against the government’s interests to sell a part of Ecopetrol (NYSE: EC). Last week, President Iván Duque said he approved of Ecopetrol’s bid which should make it fairly clear that selling ISA is only one of his objectives and, frankly, maybe not the principal one.

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