The first committee of the Council decided on Tuesday, with four votes against and three for, sink the draft agreement which aimed to sell the shares that EPM holds in UNE. Simón Pérez, Simón Molina, Daniel Duque and Sebastián López voted against the initiative; in favor, Aura Marleny Arcila, Carlos Romero and Babinton Flórez.
The head of the EPM, Jorge Carrillo, deplored the decision of the Council: “when the discussion is fueled by arguments of mistrust or political there is no opening to check the technical and financial arguments”.
According to him, the refusal of the project leaves two losers: the EPM and the public goods. “Hopefully there will be an answer in the future for what will be lost with this decision. It’s not a minor decision. There is a natural opposition to the administration, there are other independent voices, but beyond the political victory, I must congratulate Millicom because they won”.
Carrillo said they respect the council’s decision and will insist that the guarantee of the sale be given: “The main point of the discussion has been lost. We put all the arguments of convenience, we will look for alternatives, we hope that the future regulations will accompany us. It would be very painful to start removing resources from our infrastructure have to capitalize on ONE“.
The director of EPM’s Sinpro union, Olga Lucía Arango, said in the first part of the debate that the current administrations of Medellín and EPM have offered no guarantees. He said Millicom’s apparent strategy is to delay the sale and concluded it was an obligation to review the foreign company’s financial movements since 2014 and debts acquired by UNE since the merger.
The same argument was mentioned by Councilor Daniel Duque, who justified his refusal by the mistrust generated by the government of Daniel Quintero.
Councilor Simón Pérez, who had requested the postponement of the June 2 debate until he had more technical information, said that he defended a non-reductionist vision of the state and that public participation in this sector is essential, especially if Medellin is now a district of science, technology and innovation. “If I made a mistake in the future I will come out and apologize, but saying no is what calms me down today,” he said.
Councilor Aura Marleny Arcila, speaker coordinator, expressed for her part that not making decisions or doing them at the wrong time may lead to a loss of value in the participation of state entities in the companiesin addition to a delay in the development of communities.
How is the schedule?
EPM and Millicom having failed to reach an agreement on the extension of the protection of public property clause, the timetable for the disposal of the shares was on the edge due to the legal deadlines it had to respect. This clause gives EPM the guarantee that Millicom itself buys preferablywhich allows you to have a reasonable sale of your assets, at a fair market price.
According to EPM, the process can take up to two years and the clause expires in August 2024, the date on which the transaction should have been concluded. Law 226 of 1995 provides that the offer of the shares will be primarily intended for the beneficiaries of special conditions and, secondly, for the general public.
Once these two instances have been exhausted, if EPM still retains shares, two other steps have been established, including the offer of preferential rights to Millicom shareholders.
If after the deadline, EPM is unable to sell its entire stake to Millicom and Millicom does not exercise its preferential right, The EPM will lose the tax that the clause allows: put 100% of the company up for sale.
Another chapter in a controversial case
UNE was born on July 1, 2006. On that day, it officially began operating, apart from its parent company, EPM. The idea of creating a company that would provide telecommunications services came from the office of the mayor of Sergio Fajardo.
For this purpose, Agreement 45 of 2005 was presented, which was approved by the Council. In short, Mayor Fajardo received approval to transfer a block of EPM assets to a joint stock company. The legal nature of the new body should be a decentralized public service company of the Commune. UNE was therefore born from the integration of the Telecommunications strategic area of EPM and the company Orbitel SA
The history of UNE changed in 2013. That year, the mayor of Medellín, Aníbal Gaviria, offered to seek a partner for the company. On May 9, 2013, the Council of Medellin approved draft agreement 17. This provided, among other things, that the company would become a mixed economy, but that the municipality would be the main shareholder. There were 11 councilors who voted for and 9 against in a debate that ended at dawn.
The chosen partner was Millicom, an international telecommunications company that operates in Africa and America. Thus, UNE and Millicom merged into a new company. For 49% of the shares, the Municipality received $1.4 billion in cash between transfers and dividends. With this money, a fund was created to take advantage of public works in the city. Parques del Río, the Picacho cable and the Mova cable, among others, have been financed with this fund.
With the sale, EPM was left with half plus one of the shares, which was required by the Board-approved agreement. However, Millicom paid a control premium with which it managed administrative, financial and operational aspects of the merged company.
During this negotiation, sealed in 2014, a 10-year validity of the public heritage protection clause was agreed, which expires in August 2024 and is the key to the current debate.
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