The sale of Colombia’s ownership of 57.6% in the electricity company Isagen will most likely go to foreign investors as it enters its final stage, local media reported.
Although many Colombian companies fought hard to keep the proverbial “jewel in the crown,” all have been outbid so far by foreign enterprises, according to Colombia’s Semana newsmagazine.
According to Reuters. the energy giant owns and operates six electricity generators in the departments of Antioquia, Santander, Caldas and Tolima, which produce 14.5% of Colombia’s energy. Isagen’s share prices surged 8.3% after the re-election of President Juan Manuel Santos in June.
MORE: Santos reelection spurs Isagen shares to biggest gain in 5 years: Bloomberg
Multinational suitors
Colombian companies such as the Argos Group, the Energy Group of Bogota, and the Public Enterprises of Medellin all fell to the wayside of heavy international investors.
The major contenders for a stake in Colombia’s third largest producer of electricity include Spain’s Gas Natural Fenosa, America’s Duke Energy, France’s GFD Suez, and China’s Huadian Corporation.
There is still time for a Colombian company to swoop in before the planned sale in August.
According to Isagen’s most recent shareholder report, the generated a net profit of $233.9 million in 2013.
However, the Colombian government expects to raise only $2.7 billion from selling the energy giant, saying the money will be invested on roads and infrastructure, according to Semana.
Objections
A year after announcing the sale of Isagen, the Colombian government has made clear that the auction will be held in the middle of August, 2014, according to Semana.
MORE: Colombia seeks to sell Isagen stake hopes to generate $2.4B for infrastructure
Santos’ opponent, Oscar Ivan Zuluaga, opposed the sale of Isagen on the grounds that Colombia needed competitive energy.
However, opponents argue that the sale of Isagen could cause Colombia to lose energy resource management and sovereignty, as well as a possible increase in electricity rates.