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EPM will sell assets for $ 3.5 billion to face the Hidroituango crisis

July 31, 2018 – 10:22 p.m.
2018-07-31 By:

Colprensa / El Colombiano

EPM announced on Tuesday that it will request the Council of Medellín authorization to sell badets worth between 3.5 and 4 billion pesos , to obtain resources that allow maintaining the solvency of the group. The disposal would include its participation in different companies, including 10% of the shares of ISA and others of Davivienda.

Jorge Londoño de la Cuesta, manager of EPM, explained that the intention -in addition to leaving small shareholdings- is to sell the companies that EPM has in Chile, one of them dedicated to the water service and another to the generation of wind power.

"We will begin the process to dispose of Aguas de Antofagasta and the Los Cururos wind farm. With this, the EPM group will ensure the necessary capital to continue carrying out all the investments required by the group and attend to the contingency in Hidroituango in the best possible way, "he said.

According to Londoño the company has contemplated, in its plan of organic growth, investments for 10 trillion pesos in the next years, the majority of those resources will go to the strengthening of the aqueduct and sewerage in Medellín and other regions of Antioquia, as well as to power transmission and distribution lines. "That investment train can not be stopped. It is a clear decision from the beginning of the administration. "

In addition, to ensure economic solidity, the company will launch a savings plan that aims to reach a trillion pesos in four years. "The investment train does not slow down. EPM, fortunately, has financial strength to overcome the contingency in Hidroituango, "he added.

Read also: 'Ideam is kept on alert for possible landslides in Hidroituango.'

As of December 2017, investments in subsidiaries and affiliates of EPM totaled 9.3 trillion pesos, bringing the board's decision is the eventual sale of 32.2% of that portfolio.

It is worth mentioning that as a consequence of the contingencies in Ituango, on May 11, the rating agency Fitch Ratings placed the long-term national rating of AAA of EPM in negative observation from a stable perspective.

"The negative observation on the rating reflects a greater probability of delays in the construction of the Ituango hydroelectric project, which will probably increase the pressure on EPM's capital structure in a sustained manner. Additionally, logistical and environmental aspects increased the uncertainty surrounding the possibility of significant cost overruns and badociated liabilities. The qualification action responds to the sudden collapse of a section of the mountain where Ituango is located and which blocked the Cauca river diversion tunnel downstream of the project, "Fitch noted.

In turn, on May 24, the rating agency Moody's Investors Service reviewed EPM's rating and placed it in Baa3, maintaining the degree of investment at an international level.


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