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The agreement for Brookfield to take control of Gas Natural did not convince the government, which acted to protect minority interests. That’s how other offers came for that company. Chronicle of a business novel.

What ended the possible agreement of Brookfield and Gas Natural In 1997 Gas Natural Fenosa acquired control of the Colombian company Gas Natural ESP. It has had a significant growth and is attractive to serve the market in the center of the country. Photo: photography: COURTESY ECOPETROL.
In mid-November of last year, when the eyes of energy market transactions were placed on the sale of 20% of Grupo Energía de Bogotá (GEB) and the issuance of shares of Celsia -businesses that could exceed $ 5, 5 trillion-, an ad stirred up the market.

Gas Natural Fenosa (GNF) reported that it had reached an agreement with the Canadian investment fund Brookfield for the sale of its 59.1% stake in the Gas Natural operation in Colombia, one of the most attractive companies in the sector. distribution and retail sale of gas, because it serves the market in the center of the country. That move would exceed 482 million euros.

They are two powerful players in the global energy business and in Colombia: GNF, in addition to this operation, was also the parent company of Electricaribe, the energy distribution company that serves the seven departments of the Atlantic Coast and was intervened and it advances in its liquidation by the Superintendency of Public Services, due to its financial difficulties and the deep problems it has in the quality of the service. Today, the model and structure for the arrival of a new operator and to ensure the future of the provision of the service is to be defined. In the world GNF is present in 30 countries with more than 22 million customers.

Visit: Canacol Energy confirms first discovery of natural gas in 2018

For its part, Brookfield has been gaining ground in the Colombian energy market: at the beginning of this decade it bought the Empresa de Energía de Boyacá and in 2016 it was not only with 57% of Isagen that was in the hands of the Nation, but which acquired the minority interests and already owns 99% of the company. This fund in the world has US $ 250,000 million in assets under management.

The agreement between GNF and Brookfield was recorded by the media and was classified as one of the big businesses of the end of the year and the beginning of this one.

Photo: Bruce Flatt, CEO of Brookfield / Isidre Fainé, president of Gas Natural Fenosa

However, the operation was not so simple, as Gas Natural S.A. ESP is a listed company on the Colombian Stock Exchange and, although the rules of the game allow for some pre-agreements to buy and sell shares, they also require a Public Offering of Shares (OPA) so that minority shareholders can decide freely if they remain or sell their shares; The objective is to prevent them from being trapped with a low price or in a company that would no longer be attractive to them.

The parties -GNF and Brookfield- designed a complex legal and financial structure that caused the authorities of the sector to set the alarm and even the high government to warn the problems.

In a conversation with the magazine Dinero, Mauricio Cárdenas, Minister of Finance, said that the way in which the operation was initially conceived “did not correspond to the norms of the Colombian stock market. When a company is registered in the stock market and someone wants to buy a majority stake in it, the procedure must be open so that all interested parties can participate. “

Photo: Mauricio Cárdenas, Minister of Finance / Jorge Castaño, Financial Superintendent.

Prior to the operation, Gas Natural Fenosa – through Gas Natural Distribución Latinoamérica – owned 59.1% of Gas Natural S.A. ESP, the second largest shareholder was the Bogotá Energy Group (GEB), with about 25%, then the Porvenir pension fund, with more than 10% and other pension funds and individuals and legal entities, had close to 6% remaining (a group of less than 50 shareholders).

The problem was not simple, because one of the protagonists -GNF- was, precisely, one of the companies with which the Government has had major confrontations in recent years on behalf of Electricaribe. For this case, GNF has an international litigation against the Colombian State, which exceeds one billion euros (see box).

What happened, what is the process and what is coming? This is the story.

The case

On November 17, in a statement dated in Madrid (Spain), GNF announced that through Gas Natural Distribución Latinoamérica it had agreed with Brookfield Infrastructure the sale of its 59.1% stake in Gas Natural S.A. ESP, in Colombia.

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