Colombia's EEB Resumes Trading After Suspension Over Price Decline

Colombia's Empresa de Energia de Bogota (EEB.BO) resumes trading on the local stock exchange Tuesday after buying and selling of the state-run power company's shares was halted last week due to a sharp price decline.

Shares of EEB, which is majority-controlled by the city of Bogota, fell 17% between Monday and Wednesday last week in a move analysts blamed on a plan by Bogota Mayor-elect Gustavo Petro announced in early December to merge money-making EEB with money-losing, government-run telecommunications firm ETB (ETB.BO).

Colombia's stock-market regulator decided to halt trading midday Wednesday, saying it wanted to protect investors.

The regulator has since sent statements indicating that EEB is a solid company. But analysts say those statements miss the point since the price decline wasn't related to EEB's financial situation, but rather a result of the incoming mayor's plan to merger EEB with ETB.

Analysts at Celfin Capital said investors feel slighted by the plan because ETB is "crying out for cash amid fearsome competition" from the local units of Spanish telecommunications company Telefonica SA (TEF, TEF.MC) and Telefonos de Mexico SAB de CV (TFONY, TMX).

Petro, who stands by the merger plan, says his comments about a merger are not the cause of the share price decline. He notes that he originally made the merger proposal months ago during his campaign. Petro has asked regulators to investigate the "true" causes of the share price decline.

EEB shares will begin trading Tuesday at 1,050 pesos ($0.5336), the level they were at when trading was halted Wednesday.

-By Dan Molinski, Dow Jones Newswires; 57-310-867-6542; [e-mail]