BOGOTÁ, Colombia, Dec. 7, 2017 /PRNewswire/ — Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) reports that as part of its transformation process, it is continuing the strategy of optimizing its capital structure in the Business Group (GEE). The strategy’s objectives include an efficient allocation of debt within the companies comprising the Business Group. This is in line with the company’s commitment to encouraging savings and optimization with a view to generating financial efficiencies in the consolidated results.
The operating and financial results achieved by the group’s companies are reflected in a solid cash position, allowing it to continue optimizing its capital structure. As part of its implementation of this strategy, in December the business group will execute the three transactions described below:
Ecopetrol and Refinería de Cartagena S.A. (Reficar) have received authorizations from the Colombian Ministry of Finance and Public Credit [Ministerio de Hacienda y Crédito Público] (MHCP) through Resolutions No. 4095 of December 5, 2017 and 4112 of December 7, 2017, for Ecopetrol, as sponsor, to assume Reficar’s debt under the same financial conditions as for amount, term and interest rate, according to the voluntary takeover mechanism stipulated in the financing agreements entered into by both companies in 2011.
Having completed its processing with the export-promotion agencies and international banks, Ecopetrol will assume approximately USD$ 2.666 billion in nominal debt plus interest accrued as of the takeover date. This voluntary debt assumption by Ecopetrol involves a capitalization of Reficar for the value of the debt assumed.
Ecopetrol will capitalize the COP$1,109,626 million loan plus interest, which it granted to Reficar in 2010.
Upon capitalizing the aforementioned debts, corporate documents will be signed to define the relationships and commitments created for shareholders of that subsidiary, to complete the capitalization.
It is significant that the measures for debt assumption (1) and capitalization (2) have no effect on the Ecopetrol Group’s debt level, since the debt is already reflected in the consolidated financial statements.
Ecopetrol reports that on December 15, 2017, it will pay off in advance the loans from both The Bank of Tokyo-Mitsubushi UFJ, Ltd. (BTMU) and Export Development Canada (EDC), with nominal values of USD$175 million and USD$300 million, respectively. The original payoff year for those facilities was 2021.
After the transactions mentioned above, which fulfilled all the procedures and approvals internal and external required, the business group’s nominal debt will decline to USD$ 14.580 billion.