After Colbun dropped out of bidding last Friday (causing Colbun’s stock to rally strongly, up of 3.2%), only one bidder remains in contention for tomorrow’s January 13 auction for Colombian government controlled power producer, Isagen. Isagen is the third largest energy producer, behind Emgesa, and City of Medellin owned multinational Empresas Publicas de Medellín (EPM).
As of press-time the day before, Colombia’s President Juan Manuel Santos remains defiant against his critics in Congress and certain voices in the public, stating via Twitter that there is no legal impediment and that the legality of the process has been ratified by the Council of State.”
A statement posted on Colbún’s website signed by General Manager Thomas Keller Lipportd read, in part: “Soon after evaluating the situation in corporate meetings, and with attention to the recent media reports that assure the participation of Colbún in the final stage of the public auction process if Isagen, implicating the presentation of an offer next January 13, Colbun informs that, due to the new terms established by the authority for the presentation of the Offer, and also in part, because of the raising of the price some 21.5%, we will not be in conditions to present an offer on the defined date.”
The sale of Isagen is slated to take place tomorrow, Wednesday January 13 at 8am. If the sale does indeed go ahead, Canadian investment manager Brookfield Asset Management is expected to purchase Isagen at the auction’s minimum price of $4130 COP per share. This reflects a 21% increase over the price set for the auction slated for May of 2015 that ended up being delayed by legal maneuvering by opponents to the sale. At that time there were seven interested bidders.
“This won’t be an auction. Who will bid up the price? Or is it that Brookfield, in an act of generosity towards Colombia, will pay more than the base price?” asks rhetorically Mario Alejandro Valencia, a member of “Red de Justicia Tributaria” (Fiscal Justice Network).
“We don’t consider this an auction,” Elber Castaño, a member of Isagen’s Union told Colombian daily El Tiempo. Members of Congress, currently not in session, from various political parties are also calling for a halt to the sale. “
Why is it the Council of State (Cabinet) prohibits assigning a TV channel with only one bidder, but the government threatens to sell Isagén with only one bidder?” asked ex-President and current Senator Alvaro Uribe.
Finance Colombia will continue to monitor the situation. Follow us on Twitter for real time updates.
Photos courtesy of Isagen