Colombia’s Ecopetrol buys 51.4% of the electric company ISA for US$3,6 million

RIO DE JANEIRO, BRAZIL – On Wednesday, the Colombian state-owned oil company Ecopetrol announced an agreement with the Ministry of Finance to acquire all the shares that the Nation has in the company Interconexión Eléctrica S.A. (ISA), which will give it control of 51.4% of the outstanding shares of that company.

According to Ecopetrol, the agreed price per share is 25,000 pesos (about 6.34 dollars today), bringing the total transaction to 14.23 billion pesos (about 3.6 billion dollars).

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“The price presented reflects the value of ISA and its future growth, the result of a rigorous and exhaustive analysis by a group of experts,” said Ecopetrol, Colombia’s largest company.

The purchase of the State’s participation in ISA had been proposed by Ecopetrol on January 27 when, as part of its transformation into an integrated energy company, it made a non-binding offer for this company, which is a regional leader in electricity transmission with operations in Colombia, Brazil, Chile, and Peru, among other countries.

SHAREHOLDER REORGANIZATION

The oil company added that this agreement is beneficial for both companies and the country “because the Nation maintains its shareholding in both companies”.

“This is a shareholding reorganization in which Ecopetrol and ISA continue to belong to all Colombians,” said Finance Minister José Manuel Restrepo at a press conference, pointing out that the operation allows the country’s investment, reactivation, economic growth, and development needs to be met.

Restrepo added that the purchase contributed to achieving social and fiscal sustainability and assured that it is “a vital” and strategic resource for the future of Colombia to be more sustainable since it is a step in the transformation of Ecopetrol into a carbon-free company.

Ecopetrol highlighted that the operation makes it “a leading conglomerate in the energy transition in the western hemisphere that integrates the hydrocarbon value chain businesses, with energy transmission, renewable energies, infrastructure, and nature-based solutions”.

“ISA manages a large-scale energy infrastructure business with low emissions, with growth prospects that are associated with these megatrends and this growing demand for energy and reliable electrification. ISA will continue to be ISA,” said Ecopetrol’s president, Felipe Bayón.

His new strategy will also allow Ecopetrol to face more firmly the volatility of the world price of crude oil, said the company, according to which the agreement announced today is the product of two years of work that included rigorous analysis and evaluations of the business opportunity.

Bayón also assured that with this agreement, both companies are strengthened and will have more opportunities for growth and access to markets in the future, not only in Colombia but also at a continental level.

A week ago, Ecopetrol announced a net profit of 3.7 billion pesos (about 946 million dollars) in the second quarter of 2021, a record for the company with respect to the same period of previous years.