The mayor-elect of Bogota asked the management of city-run electricity company EEB to “use the share buying fund to prevent speculative blows” Friday.
The share value of EEB fell by 17% in two days, a loss equivalent to $934 million, after Gustavo Petro talked about plans to merge it with Bogota’s telephone and water companies (ETB and EAAB) earlier this week.
The share price drop was so concerning that the trading of EEB shares was suspended Wednesday by the financial superintendent as a preventative measure to protect shareholders.
Petro denied responsibility for the loss in value of EEB shares, laying blame on external economic factors and speculation in the market. “In these processes of capitalization by third parties there must always be constant vigilance of speculative blows,” he said.
Petro said on his Twitter page “I will seek a meeting with the financial superintendent Gerardo Hernandez in order to examine the circumstances which provoked the events which took place on Monday and Tuesday.”
Petro also made a direct call to EEB president Monica de Greiff to “be alert to stop speculative blows .. in order to recover the share price.”
He also tweeted that he will not be detered by those who insult him by calling him ignorant.
Bogota owns 76.2% of EEB whereas it used to own 81.5%. Petro said that the city percentage ownership of EEB would decrease during his administration.
Petro gave an interview to newspaper El Tiempo December 4 in which he elaborated on his pre-election plan to merge the three big utility companies of Bogota.
He said that as the electricity company has a surplus and the water company has a deficit, a merger would cancel out the positive and negative balances. He said that the rates will be similar to those of EPM, Medellin’s city-run utilities company – which had made Medellin more efficient and profitable.
He critized the fact that EEB in making investments in gas projects in Lima, Peru, instead of investing in the Bogota Water Company.
He completely ruled out the sale of ETB telecommunications company.
Moody’s credit rating agency gave EEB a investment grade of Baa3 November 1.