In December 1997, the Government of Colombia began implementing the capitalization of Corporación Eléctrica de la Costa Atlántica, ("Corelca") and its nine affiliated electricity distribution companies of the Atlantic Coast.
As part of the privatization process, the Government proposed the reorganization of Corelca and the Electrificadoras into five (5) business units, as follows:
ii) Transelca, consisting of the transmission assets and specifically-defined liabilities of Corelca;
iii) Electrocosta, consisting of the distribution assets and specifically defined liabilities of Electrosucre, Electribol, Electromagangué, Electrocórdoba and Corelca;
iv) Electrocaribe, consisting of the distribution assets and specifically defined liabilities of Electroguajira, Electromagdalena, Electroatlántico, Electrocesar and Corelca, and
v) SAPL consisting of the distribution assets and specifically defined liabilities of the Electrificadora de San Andrés.
On August 4, 1998 the Colombian Government awarded to a Consortium composed by Houston Industries from USA and Electricidad de Caracas from Venezuela the right to capitalize, up to 65% of Electrocaribe and Electrocosta. The remaining 35% ownership interest in the companies was kept by the Government. The Consortium is currently a major shareholder of the Empresa de Energía del Pacífico - EPSA- at Cali, Colombia and it also has presence in Salvador, Argentina and Brazil.
The proposal of Col $1,438,752,381,000 made by the Consortium exceeded in Col $305,000,000,000 the minimum price established by the Government to capitalize the companies. Pursuant to the scheme designed by the Government and its advisors Electrocaribe will assume around Col$617 thousand million pesos in debts that were originally from the Electrificadoras of Atlántico, Magdalena, Cesar and Guajira and Electrocosta will assume Col$417 thousand million in debts corresponding to Electrificadoras of Bolívar, Córdoba, Sucre and Magangué.
On August 19, Interconexion Electrica S.A. (an electric public utilities company) acquired 65% of Transelca for Col $257.403 million, nearly Col $80.00 million over the minimum price set by the government. [QQ]
The content of this article is intended to provide a general guide but specialist advice should be sought about your specific circumstances.
GOMEZ PINZON & ASOCIADOS
Carrera 9 No. 73-24 Pisos 1,2,3 y 5
Santafe de Bogota, Colombia
Telephone : 571- 3107055/ 5066
Facsimile : 571- 3106646/6657
Email : Click Contact Link
Website : Click Contact Link
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”