Colombia's EEB Resumes Trading After Suspension Over Price Decline
December 13 2011 - 8:08AM
Dow Jones News
Colombia's Empresa de Energia de Bogota (EEB.BO) resumes trading
on the local stock exchange Tuesday after buying and selling of the
state-run power company's shares was halted last week due to a
sharp price decline.
Shares of EEB, which is majority-controlled by the city of
Bogota, fell 17% between Monday and Wednesday last week in a move
analysts blamed on a plan by Bogota Mayor-elect Gustavo Petro
announced in early December to merge money-making EEB with
money-losing, government-run telecommunications firm ETB
(ETB.BO).
Colombia's stock-market regulator decided to halt trading midday
Wednesday, saying it wanted to protect investors.
The regulator has since sent statements indicating that EEB is a
solid company. But analysts say those statements miss the point
since the price decline wasn't related to EEB's financial
situation, but rather a result of the incoming mayor's plan to
merger EEB with ETB.
Analysts at Celfin Capital said investors feel slighted by the
plan because ETB is "crying out for cash amid fearsome competition"
from the local units of Spanish telecommunications company
Telefonica SA (TEF, TEF.MC) and Telefonos de Mexico SAB de CV
(TFONY, TMX).
Petro, who stands by the merger plan, says his comments about a
merger are not the cause of the share price decline. He notes that
he originally made the merger proposal months ago during his
campaign. Petro has asked regulators to investigate the "true"
causes of the share price decline.
EEB shares will begin trading Tuesday at 1,050 pesos ($0.5336),
the level they were at when trading was halted Wednesday.
-By Dan Molinski, Dow Jones Newswires; 57-310-867-6542;
dan.molinski@dowjones.com