Ecopetrol obtains authorization to execute a loan agreement with an international bank for two-hundred fifty million dollars

Rhea-AI Summary

Ecopetrol (NYSE: EC) has received authorization from Colombia's Ministry of Finance and Public Credit to execute a $250 million loan agreement with Sumitomo Mitsui Banking The loan, expected to have a 5-year term with principal payable at maturity and a variable interest rate, will be used for non-investment expenses, including repayment of financial commitments maturing in 2026.

The agreement includes standard default clauses and will be governed by New York State law. This move aligns with Ecopetrol's position as Colombia's largest company and a major integrated energy player in the Americas, with significant operations in hydrocarbon production, transportation, refining, and petrochemicals, as well as recent expansions into power transmission and infrastructure through its acquisition of ISA shares.

Positive

• Authorization obtained for a $250 million loan, improving liquidity
• 5-year loan term with principal payable at maturity, providing financial flexibility
• Proceeds to be used for repayment of financial commitments, potentially improving debt structure

Negative

• Increase in debt levels by $250 million
• Variable interest rate on the loan, potentially leading to higher interest expenses if rates rise

BOGOTA, Colombia, Aug. 21, 2024 /PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) ("Ecopetrol" or the "Company") announces that the Ministry of Finance and Public Credit ("MHCP") has authorized Ecopetrol to execute a loan agreement for up to two-hundred fifty million dollars through Resolution 2476 dated August 20, 2024.

The loan is expected to be executed by and between the Company, as borrower, and Sumitomo Mitsui Banking Corporation, as lender. The term of the loan is expected to be five years, with the principal payable at maturity and a variable interest rate. The proceeds from this transaction are expected to be allocated to non-investment expenses, including the repayment of financial commitments maturing 2026.

According to the procedure outlined in the contract, the MHCP reviewed and authorized the terms, which anticipate borrower default events such as non-payment or failure to fulfill obligations. If these events materialize, the lenders may demand early repayment. Additionally, Ecopetrol may seek recourse if the agreed disbursements are not made. All of the above is in compliance and will be governed by the laws of the State of New York.

Ecopetrol is the largest company in Colombia and one of the main integrated energy companies in the American continent, with more than 19,000 employees. In Colombia, it is responsible for more than 60% of the hydrocarbon production of most transportation, logistics, and hydrocarbon refining systems, and it holds leading positions in the petrochemicals and gas distribution segments. With the acquisition of 51.4% of ISA's shares, the company participates in energy transmission, the management of real-time systems (XM), and the Barranquilla - Cartagena coastal highway concession. At the international level, Ecopetrol has a stake in strategic basins in the American continent, with Drilling and Exploration operations in the United States (Permian basin and the Gulf of Mexico), Brazil, and, through ISA and its subsidiaries, Ecopetrol holds leading positions in the power transmission business in Brazil, Chile, Peru, and Bolivia, road concessions in Chile, and the telecommunications sector.

For more information, please contact:

Head of Capital Markets (a)
Lina María Contreras Mora
Email: investors@ecopetrol.com.co

Head of Corporate Communications
Marcela Ulloa
Email: marcela.ulloa@ecopetrol.com.co

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SOURCE Ecopetrol S.A.

FAQ

What is the purpose of Ecopetrol's (EC) new $250 million loan?

The loan is intended for non-investment expenses, including the repayment of financial commitments maturing in 2026, potentially improving Ecopetrol's debt structure.

What are the key terms of Ecopetrol's (EC) new loan agreement?

The loan has a 5-year term, with principal payable at maturity and a variable interest rate. It will be governed by New York State law and includes standard default clauses.

Who is providing the $250 million loan to Ecopetrol (EC)?

The loan is expected to be provided by Sumitomo Mitsui Banking , an international bank.

When did Ecopetrol (EC) receive authorization for the $250 million loan?

Ecopetrol received authorization from Colombia's Ministry of Finance and Public Credit on August 20, 2024, through Resolution 2476.