LatAmOil: Ecopetrol given more time to prepare ISA offer

Ecopetrol, Colombia’s national oil company (NOC), has said that the government will extend the period during which it has the exclusive right to negotiate for a 51.4% equity stake in Interconexion Electrica SA (ISA), the country’s electricity transmission system operator (TSO).

In a statement dated June 24, Ecopetrol reported that the end date of its exclusivity agreement with the Ministry of Finance and Public Credit (MHCP) had been pushed back to August 31. The agreement had originally been due to expire on June 30.

The NOC’s request for the extension is related to its decision not to pay for the majority stake in ISA via an offering of 8.5% of its own shares. Instead, Ecopetrol has informed MHCP that it is looking to finance the transaction with a bank loan. If so, the Colombian government’s stake in the NOC would remain at 88.5%.

Ecopetrol pointed out that its finances had improved since it announced its intention of buying the ISA stake earlier this year. “This decision relies on the favourable evolution of the financial situation of Ecopetrol Group, which provides the flexibility to achieve the closing of the ISA transaction through a credit facility with international banks, and aligned with the leverage parameters established in the company’s business plan,” the company said.