Ecopetrol Lines Up Non-core Asset Sales

In line with its policy of divesting non-strategic assets, Colombia's state oil company Ecopetrol plans to sell a stake in petrochemicals company Monůmeros Colombo-Venezolanos, power transmission company Transelca, power distributor EEB and the Invercolsa natural gas distribution holding, an Ecopetrol source told BNamericas.

Ecopetrol and state-owned industrial development institute IFI, which is in the process of being wound up, will offer their combined 47% stake in Barranquilla-based petrochemicals company Monůmeros Colombo-Venezolanos within the next few weeks, an Ecopetrol source told BNamericas. Monůmeros makes caprolactam, the raw material for nylon production.

In line with Colombian law, the stake will first be offered to the so-called solidarity sector of bodies, including past and present Ecopetrol employees and pension funds. In the event that they do not buy, any or all, of the stake on offer, the sale will be thrown open to institutional investors and the general public alike, the source said.

Ecopetrol considers that the 47% stake could be sold for the equivalent of US$30mn, the source said. The stake could interest petrochemicals and textiles companies, as well as institutional investors.

Institutional investors would be the more likely buyers of Ecopetrol's 35% stake in Transelca and 7% of EEB, the source said. That sale is lined up for the end of the first quarter 2005 or the start of 2Q05.

The sale of Ecopetrol's controlling stake in Invercolsa (Inversiones de Gases de Colombia) has not been approved by the board yet but is under consideration. Invercolsa holds stakes in a number of gas distributors throughout the country.

Ecopetrol has already started the process of divesting its 2.25% stake in gas distributor Gases de la Guajira, for which it expects to receive the equivalent of some US$70,000, the source said.

All the divestments seek to focus Ecopetrol more on core business and exit businesses in which the money and effort put into administration is not matched by the dividends the company receives from those holdings, the source added.

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