Skadden and BLP represent Celsia in the sale of renewable assets in Panama and Costa Rica  

Skadden Arps Slate Meagher & Flom and BLP have represented Celsia, a Colombian renewable energy and energy efficiency company belonging to Grupo Argos (through its companies in Central America) in an agreement with Fontus Spain (a subsidiary of EnfraGen), for the sale of six generation assets in Panama and Costa Rica.

The transaction includes the Dos Mares hydroelectric complex in Chiriquí (Panama), with a capacity of 118 MW, the Divisa (9.8 MW) and Celsolar (9.7 MW) solar farms in Chiriquí (Panama) and the Guanacaste Wind Farm (Costa Rica) with a capacity of 50 MW.
The value of the transaction amounts to USD 194 million and the closing process should take about three months.

The proceeds from the sale of these assets will allow Celsia to continue growing in renewable energies, strengthen its liquidity position, improve the return on invested capital, reduce debt, and support the share repurchase approved at the recent shareholders’ meeting.
Thus, Celsia will continue to deploy its business strategy in Central America focused on renewable energies - especially solar and wind - in its different geographies, and will seek opportunities to strengthen the asset management portfolio (transmission and distribution) and energy efficiency.

With this operation, the consolidated debt would be reduced by USD 198 million, which corresponds to the debt of these companies. The projects currently under execution will total 55 MW solar by the end of 2023 and the company expects to have 200 MW installed by 2026.

"We are reorienting our investment strategy in Panama, Costa Rica and Honduras towards solar energy, mainly for business customers, and in the expansion of our asset management model and energy efficiency solutions. Our focus will be to offer a competitive, flexible portfolio that is tailored to the needs of Central American customers. That is why we decided to sell part of our generation assets to EnfraGen, a company we know well, which shares our values and the way we do things. With this transaction, we will be able to improve our financial flexibility and, by doing so, our profitability indicators will improve substantially. It is a healthy rotation that will allow us to develop a different way of approaching geographic diversification by seeking the development of greenfield projects", stated Ricardo Sierra, Celsia’s CEO.

He also expressed his appreciation to the people who work in these operations and who will continue to do so for the new company: "It is not easy to say goodbye to a group of people who have given their best so that these assets are in operation and provide Panama and Costa Rica with an energy service that today is a benchmark. Our recognition, affection and gratitude because they have performed their roles in an outstanding manner, and that is what today allows us to make a sale in the best conditions for them and for the company".

This transaction will also allow Celsia to strengthen its liquidity position, improve its return on invested capital (ROCE) from 14.8% to 18.8%, even though it would have a reduced ebitda of COP 222,000 million. (According to 2022 results); reduce consolidated debt by USD 198 million, which will reduce financial expenses by COP 69 billion, 11% less financial expenses, go from 3.02 times to 2.44 times the net debt over ebitda indicator, which, added to a debt duration close to 6 years, enables an excellent position for future challenges and opportunities, and provide resources for the repurchase of shares of Celsia S.A. and other uses that the Board of Directors may decide.
Today Celsia serves a significant number of customers in the Central American region, with photovoltaic solutions for businesses and homes, and more than 34 MW installed, representing 45 GWh per year. With the projects currently under execution, it will add 55 MW by the end of 2023 and expects to have 200 MW installed by 2026. In addition, the company continues to operate the thermal capacity of the Colón Thermal Complex in Panama.

EnfraGen is a private company that operates energy and infrastructure projects worldwide. It has a solid track record and corporate values aligned with those of Celsia. In Latin America it has a strong presence in the energy sector, particularly in the power generation and transmission markets in countries such as Colombia, Chile and Panama.
For the transaction, Celsia was advised by Banca de Inversión Bancolombia S.A. Corporación Financiera as financial advisor, Skadden, Arps, Slate, Meagher & Flom LLP as legal advisor in New York, Alcogal as legal advisor in Panama and BLP as legal advisor in Costa Rica.

The Skadden team consisted of Partner Paola Lozano and Associate Daniel Hernandez.
The BLP team consisted of Partners Luis Castro and Julio Castellanos.