Bogotá — Colombia’s Ministry of Finance and Public Credit has authorized the country’s oil company Ecopetrol to contract external loans for up to $1 billion, and which will be used to finance the company’s organic investment plan for 2023.
The loans will be signed with Deutsche Bank AG; Banco Inbursa S.A.; Banco Latinoamericano de Comercio Exterior S.A. and ICBC Standard Bank Plc.
In addition, the company informed that the loan will have a term of seven years from the date of signing the agreement, with an amortizable principal payment as of the third year, and a variable interest rate previously agreed between the parties.
The signing of the loan agreement and the disbursement of the initial $800 million are expected to take place in the next few days. The loan also contemplates the possibility of making additional disbursements of up to $200 million during the 90 days following the signing of the agreement, through a contractually regulated process.
According to the oil company, “this agreement evidences the support and confidence of the international financial sector in the Ecopetrol Group’s strategy”.
The ministry reviewed and authorized the terms of the minutes that provide for the event of a default by the borrower, such as failure to make timely payment of principal and interest, eventual impairment of the borrower’s ability to pay, impairment of the integrity of its financial information, and noncompliance with contractual duties, among others, which are frequently used in transactions of this nature.
Should any of the events materialize, the lenders would be entitled to claim the payment of the debt in advance, according to the procedure provided in the contract.
In the same way, the minutes of the loan establish the right of Ecopetrol to reimburse the lenders when they do not make the disbursements in the terms described in the minutes. All of the above, in accordance with the regulatory provisions of the State of New York.
Ecopetrol is Colombia’s largest company and one of the main integrated energy companies in the Americas, with more than 18,000 employees.
In Colombia, it is responsible for more than 60% of hydrocarbon production, most of the midstream and downstream operations, including refining, and is a leader in petrochemicals and gas distribution in the country.
With the acquisition of 51.4% of ISA’s shares, Ecopetrol also participates in energy transmission, real-time systems management and the Barranquilla-Cartagena coastal highway concession.
Internationally, Ecopetrol has presence in strategic basins in the Americas, with E&P operations in the United States (Permian Basin and Gulf of Mexico), Brazil and Mexico, and through ISA and its subsidiaries has leading positions in the energy transmission business in Brazil, Chile, Peru and Bolivia, road concessions in Chile, and telecommunications.
