Fitch ratifies “AA (col)” rating to EEB; Stable Perspective
Bogotá, Colombia, 08 February 2011
Fitch Ratings – Bogotá – 24 January 2011: Fitch has stated the national long term rating to Empresa de Energía de Bogotá S.A. E.S.P. (EEB) after having announced capitalization of US$400 in Transportadora de Gas Internacional S.A. E.S.P. (TGI) and the purchase amounting to US$350 million of two gas transport assets. EEB is acquiring 15,6% of the non-controlled Promigas S.A. E.S.P. shares (National Long Term Rating “AAA (col)”) and the majority of shares in Gas Natural de Lima y Callao S.A. (Calidda).
EEB pro-forma credit metrics after the acquisition of Promigas and Calidda shares, is expected to maintain relatively the same metrics it has had historically. In the case of Promigas, as acquisition of shares is non-controlled, EEB is expected to receive dividends amounting to around US$15 million and US$20 million per year. In the case of Calidda, as the acquisition of shares implies control of the company, consolidated financial statements of EEB will reflect an increase in debt of appox. US$50 million and around US$20 million of its EBITDA. The consolidated EEB leverage recorded, measures as total debt to EBIDTA ratio, is estimated appox. 3.3 times on a proforma base. This ratio is similar to the consolidated leverage indicator of 3.3 times, recorded by the company in the past twelve months of of 30 September 2010.
During 2011, EEB will require large amounts of cash. In addition to the US$350 million in capital investments for acquisitions, the company is expected to spend approx US$155 million in capital investments for projects in Colombia, Peru and Guatemala. These investment, together with dividends payment, will correspond to the main capital requirements for 2011. The company expects to finance the foregoing obligations with cash, which as of September 2010 amounted to approximately US$158million, with resources from amortization to inter-company loans with TGI and dividends from its subsidiaries, which it expects to receive during 2011.Additional cash sources may come from minority shares in other assets and additional debt by the holding company (EEB). Promigas owns and operates directly and indirectly 3565 kms. of the natural gas transport network in the North Coast of Colombia, representing around 48% of the gas transport network in Colombia. The company's maximum gas transport capacity is 545 MCF/day and its network connects to the second largest natural gas production field in Colombia (Ballena), located in the North of the country, as well as other production fields such as La Creciente and Chuchupa.
Calidda is a natural gas distribution company that as of 2000 it was awarded a 33 year concession to build, own, operate and transfer (BOOT) the natural gas distribution in Lima and the provinces of Callao in Peru. The company began to operate in 2005, and in December 2009 it has approximately 19000 customers and 100 natural gas service stations.
EEB's rating reflects the diversification of its assets portfolio, which have a low risk profile and stable and predictable cash flow. The low risk profile is based on the diversification of energy assets, which are mostly operated in a regulated environment and natural monopoly. EEB has majority shares but it does not control the largest energy generator in Colombia, Emgesa (AAA (col)). Also, it holds similar shares in the largest energy distribution in the country, Codensa (AAA (col)), which operates in the city of Bogota. EEB holds majority stock with control in Transportadora de Gas Internacional S.A. E.S.P. – TGI- (LC IDR BB), the largest natural gas transport company in Colombia, which provides natural gas services to the main cities in the country. Lastly, EEB recently bought majority stock from Empresa de Energía de Cundinamarca, a distribution company operating in neighboring municipalities to the city of Bogota.