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Ecopetrol Boldly Advances Statutory Reform Amid Bondholder Assembly

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Michael Chen

May 21, 2024 - 02:06 am

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Ecopetrol Reaches for Statutory Reform Amid Bondholders’ Meetings

In an assertive move to secure its future, Ecopetrol S.A., lauded as Colombia's petroleum giant, announced that it held assemblies for its local bondholders on May 20, 2024. The critical gatherings were authorized by Alianza Valores Fiduciaria S.A. and Itaú Fiduciaria Colombia S.A., both acting as representatives for the 2010 and 2013 bond issues, respectively, after notices were disseminated on May 9, 2024. The announcements were published in a newspaper that benefits from broad circulation to ensure maximum stakeholder outreach.

Meeting Quorum and Procedural Outcomes

The titular convening for holders of 2013 bonds orchestrated by Itaú Fiduciaria Colombia S.A. unfolded at 8:00 a.m., with attendance achieving a quorum of 0.16% of the total outstanding 2013 bonds. A slightly higher participation was noted in the assembly for the 2010 bondholders, conducted by Alianza Valores Fiduciaria S.A. at 10:00 a.m., which resulted in a quorum of 5.28% of the aggregate outstanding 2010 bonds.

Statutory Reform Deliberations

Under the regulatory framework as outlined in article 6.4.1.1.22 of Decree 2555 of 2010, the adoption of a statutory reform mandates an affirmative vote from the majority of present bondholders who must concurrently represent no less than eighty percent (80%) of the outstanding bonds. The meetings revealed that this prerequisite threshold of eighty percent endorsement for the statutory reform, which had earlier been sanctioned by Ecopetrol's shareholders on March 22, 2024, was not attained.

The consequence has necessitated a subsequent call to authorize the statutory reform, which is planned to be publicly communicated the following day, on May 21, 2024, by the convening fiduciary agents in a widely read newspaper.

Ecopetrol's Strategic Position

Ecopetrol proudly stands as the paramount company within Colombia and has established itself as one of the substantial integrated energy conglomerates on the American continent with a workforce exceeding 18,000. In its home country, Ecopetrol is vital for producing over 60% of the hydrocarbons, and it presides over a significant fraction of transportation, logistics, and hydrocarbon refining systems. Its influence extends to a dominant standing within the petrochemicals and gas distribution realms.

The company has also embarked on strategic acquisitions, most notably the procurement of a majority 51.4% shareholding in ISA, which has positioned Ecopetrol to delve into electricity transmission, real-time systems management (through XM), and maintains stakes in road concessions such as the Barranquilla - Cartagena coastal highway.

Globally, Ecopetrol holds vested interests in prime basins across the American continent, undergoing Drilling and Exploration activities in the United States, specifically in the fertile terrains of the Permian basin and the Gulf of Mexico, in addition to international fronts such as Brazil and Mexico. Furthermore, through its subsidiary ISA and related entities, Ecopetrol has asserted itself as a leader in the electricity transmission sector in Brazil, Chile, Peru, and Bolivia, along with road concessions in Chile and in the telecommunications sector.

Looking Ahead: Ecopetrol's Forward-Looking Statements

This press release carries with it 'forward-looking statements', as recognized under Section 27A of the U.S. Securities Act of 1933, amended, and Section 21E of the U.S. Securities Exchange Act of 1934, amended. These statements are intrinsically projections, grounded solely in the judgments and expectations of the company's leadership concerning the future trajectory of Ecopetrol and its capacity to generate funds for business initiatives. The company's eventual accomplishments are dependent on a myriad of elements such as oil & gas market valuations, exploration, and production output, market circumstances, regulatory implications, the exchange rate, competitive dynamics, and the overarching performance of Colombia's economy and industry landscape.

The press release explicitly underscores that these projections are subject to uncertainties that could potentially lead to considerable divergence from anticipated outcomes, and as such, they should not be solely relied upon. Any future statements made within this document, future filings, press communiqués, or otherwise communicated orally are underpinned by risks and uncertainties. These include, but are not limited to, the company's growth prospects and the perpetual challenge of accessing capital for funding the company's business blueprint.

Denoting Contact Points

For those seeking further insights or information, Ecopetrol S.A. has provided direct channels through their officials: The Head of Capital Markets, Carolina Tovar Aragón, reachable via [email protected], and Marcela Ulloa, the Head of Corporate Communications, who can be contacted at [email protected]

Further Information for Bondholders

Ecopetrol emphasizes its commitment to transparency and stakeholder engagement. The organization has facilitated a platform for bondholders to access pertinent information relative to the bondholders' assemblies. Interested parties are encouraged to visit the following link for comprehensive details on the general conditions and requisite procedures to participate in upcoming assemblies. This initiative is a testimony to Ecopetrol's adherence to regulatory obligations and its dedication to maintaining an open dialogue with its investors.

Ecopetrol's Future Outlook

Ecopetrol's proactive stance in these challenging times reflects a commitment to strategize for long-term sustainability and profitability. With the statutory reform on the horizon, initiative for change showcases its dedication to align its corporate framework with evolving industry standards and market expectations. While the recent bondholders' meetings did not yield the necessary eighty percent approval for the statutory reform, the intent to reconvene suggests an undeterred resolve to achieve consensus among its investors.

As Ecopetrol navigates the complexities of the global energy market, it is poised to further its influence across various sectors, backed by strategic investments and ventures that span beyond its core oil production and refining. Through its subsidiaries, Ecopetrol is branching out into the realms of power transmission, real-time system management, and digital infrastructure, ensuring not only diversification but also placing itself at the vanguard of the energy sector's progression into more integrated and technologically reliant systems.

Corporate Governance Anchored in Visionary Leadership

Ecopetrol's adherence to stringent corporate governance is reflective of its recognition that enduring success and responsible energy production go hand in hand. A testament to this is its persistent engagement with bondholders to discuss key decisions such as statutory reforms which are pivotal for future operations. By continuing to involve stakeholders in its decision-making process, Ecopetrol reinforces the trust and transparency essential to corporate stewardship in the modern era.

The company's staunch commitment to governance practices goes beyond standard protocols. It is instrumental in paving the way for innovative approaches that ensure the company not only thrives in the unpredictable oil market but also adapts with agility to the rise of alternative energy sources and shifting consumer demands.

Maintaining Competitiveness in a Dynamic Industry

Heading into a new era of energy dynamics, Ecopetrol's expansive portfolio places it in a propitious position to seize opportunities both nationally and internationally. Its venture into electricity transmission and telecommunications indicate a broader vision that transcends traditional energy paradigms. Ecopetrol's diversification into infrastructure such as road concessions opens new avenues for growth, adapting to the changing needs of global transportation and communication trends.

The integration of these domains under the Ecopetrol umbrella mirrors the company's pursuit of excellence and leadership in a sector that is increasingly interconnected. By expanding its horizons, Ecopetrol not only ensures its place in the upcoming energy transition but also establishes a foundation for consistent growth and innovation in the foreseeable future.

Conclusion: Adaptability and Resilience as Core Values

In conclusion, Ecopetrol's disciplined approach to its bondholders' assemblies and strategic planning underscores the resilience and adaptability it has cultivated as core values. The decision to reconvene for the statutory reform reflects an astute understanding of corporate governance and an unwavering commitment to long-term objectives amidst short-term challenges.

Ecopetrol's forward-looking statements, signifying its anticipation of future growth and continuous quest for capital, accentuate the company's strategic mindset and its preparedness to confront a fluctuating global economic landscape. As Colombia's leading energy entity, Ecopetrol articulates a narrative of ambitious endeavors and robust partnership engagement, setting an exemplary precedent within the energy industry.

As we await the outcomes of the forthcoming bondholders' assembly and the potential approval of the statutory reform, Ecopetrol S.A. retains its stance as a beacon of industry trailblazing, ready to embrace the challenges and opportunities of the energy sector's future.