Ecopetrol CEO defends electric utility ISA deal as investors fret over ‘bailout for state’
Stock takes a hit as investors query how acquisition fits with business model of Colombian oil company
Bogota — The deal, as investors from Bogota to New York see it, has all the markings of a cash-strapped federal government forcing a state-run company to bail it out.
Ecopetrol, Colombia’s biggest oil company, would hand over about $4bn to the government in exchange for control of another state-sponsored outfit, the electric utility giant known as ISA. From the moment word of the transaction leaked in early January, questions began to pile up from perplexed investors — how did the deal fit with Ecopetrol’s business model? How will the price tag be settled? — and the stock began to badly lag the broad rally in oil drillers globally...
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