MADRID: Spanish energy company Gas Natural has asked for talks with the Colombian government on a new legal framework to allow it to recover 1.3 billion euros ($1.44 billion) in unpaid bills owed to its Colombian electricity business.
Electricaribe distributes power to 2.5 million customers on Colombia's Caribbean coast but has suffered persistent liquidity problems because of fraud and payment arrears, Gas Natural said on Wednesday.
Chief Executive Rafael Villaseca said that Gas Natural has sought talks on the matter with the Colombian government under an investment protection agreement between Colombia and Spain.
He said that company wants a regulatory framework that provides more legal certainty for recovering the debts and indicated that future investment in the Colombian operation depends on agreement being reached.
"The solution is for there to be a reasonable regulatory framework that allows us to reduce arrears and fraud to reasonable levels and allows the company to invest in growth," he told analysts on a conference call after Gas Natural announced third-quarter results. Villaseca said that such an agreement would be crucial to the future viability of the business.
"Without it, we are sincerely afraid that the project doesn't hang together," he added. Electricaribe made a loss of 24 million euros in the first nine months of 2016, compared with a net profit of 14 million euros a year earlier.
Gas Natural said that it had already made provisions for about 83 percent of Electricaribe's 1.26 billion euros in unpaid bills. The Colombian government has taken no public position on Electricaribe, but the Colombian Senate is scheduled to hold a debate on the company's situation later on Wednesday.
Colombian newspaper Portafolio reported that members of the government would meet Gas Natural Chairman Isidro Faine in Colombia on Nov. 11 and ask the Spanish company for a $66 million recapitalisation of Electricaribe.
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