Colombia’s state oil company Ecopetrol said Friday its board of directors approved outlines for a second-round of stock issuance, an offering that could reduce the state’s stake in the company to 80%.
The government has already sold 10% of Ecopetrol to the public in a previous stock offering permitted under a 2006 privatization law. That law allows it to sell a total of 20% to finance the company’s expansion projects.
A statement from Ecopetrol said that with the board’s approval of the rules and addendum to the prospectus, necessary proceedings will now get under way with securities regulators. The corresponding public offering won’t take place until those proceedings are complete, it said. A timeframe for when the public offering could take place wasn’t mentioned.
Beyond this second-round stock offering, President Juan Manuel Santos late last year signed a decree allowing the government to sell an additional 10% stake in the company. The proceeds from that sale would not go toward company expansion but rather to government reconstruction efforts from devastating 2010 rains that killed hundreds of people, washed away bridges and highways and destroyed farmland.
If the government were to sell that 10% as well, that could cut the state’s interest in Ecopetrol to as little as 70%. But after that decree was signed, officials have said it may only sell 5% rather than the full 10%, and they said they may sell as little as 1% this year.
Ecopetrol is Colombia’s largest integrated oil & gas company, where it accounts for 60% of total production. The company also bills itself as one of the top 50 oil companies in the world and the fourth largest oil company in Latin America.
Ecopetrol shares were relatively steady Friday on the Colombian Stock Exchange, declining 0.1% to close at COP3,895.
(Dan Molinski / Dow Jones Newswires)
