Swiss Bank UBS talks ‘deal of the year’

Company News    May 14, 2021 3:33 PM

Swiss investment bank UBS spoke about one of the Colombian government’s options to solve its fiscal problem: the sale of ISA’s equity stake to Ecopetrol (NYSE: EC).

UBS said that Ecopetrol’s move towards electrification could be positive, but this sale could generate certain conflicts of interest, La Republica reported.

“Regarding the sale of ISA, we have some concerns given the conflict of interest of a State-Owned Company (SOE) that acquires another SOE from the government,” UBS said.

Another move that the government could make according to UBS is the sale of 8.9% of the state stake in Ecopetrol.

“There is a mixed view of the Ecopetrol sale: it could be positive by increasing the liquidity of the share, without the government losing control,” the bank said.

The entity added that no formal announcements have yet been made about the sale of Ecopetrol’s ‘midstream’ assets.

“We consider the assets as key components of Ecopetrol’s integrated strategy that generates solid and stable results,” said the firm.

Bottom-Line: The government and companies have been unusually silent on the progress of this business, despite the controversy around financing deficits.

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