Grupo Energía Bogotá mulling US$4bn ISA bid

Grupo Energía Bogotá (GEB) has raised the prospect of acquiring a majority stake in state-controlled company Interconexión Eléctrica (ISA) as the government seeks to reduce its fiscal deficit. 

In a filing sent to Colombia's securities regulator, GEB confirmed local media reports that it could bid for the government's 51.4% interest. 

"Maintaining Colombian public ownership of a strategic company like ISA, while providing significant resources to the nation, would be a highly favorable result for the country," GEB said.

"As soon as important facts are presented regarding the various investment opportunities under constant review by GEB, they will be duly informed to the market," the filing added. 

Multiutility EPM and oil company Ecopetrol are understood to be other possible buyers in a deal that could fetch more than US$4bn, according to market observers. EPM already holds an 8.8% participation in ISA. 

Economists have warned that the government must reduce its fiscal gap, which already exceeds 8% of GDP, to maintain the country's credit rating. 

According to Bogotá think tank Fedesarrollo, falling tax revenue and spending on measures to curb the coronavirus pandemic have caused Colombia's public debt to rise by 150tn pesos (US$44bn), from 50% of GDP to 65%.

Medellín-based ISA operates 45,142km of high-voltage power lines, 907km of highways and 49,500km of fiber optic networks in Colombia, Brazil, Chile, Peru, Bolivia, Argentina and Central America.

The government aborted a planned sale of its stake in the company in 2019 amid tepid investor interest.