Colombia’s government-run oil firm Ecopetrol SA missed its target of selling COP2.5 trillion ($1.4 billion) in a local share placement that was hobbled by the recent turmoil in international markets and a slump in crude prices.
Javier Gutierrez, the company’s chief executive, said Wednesday that the company had received buy orders for COP2.4 trillion, short of the COP2.5 trillion offered. The final adjudication of the stock sale, which was geared at local investors, will be announced in the coming days.
The result is a disappointing end to a stock sale that Colombian investors had been awaiting for most of the year. Ecopetrol announced the share placement days before international stock markets began to tumble. Worries over the health of the global economy also pulled down crude prices, prompting a decline in Ecopetrol’s stock already trading in the Bogota bourse.
The COP2.5 trillion that the company offered represented a 1.67% stake in the firm. The proceeds are to be used for the company’s exploration and production projects. The company expects to invest $8.54 billion this year as part of an aggressive expansion plan to double output to 1.5 million barrels per day in 2020.
The share sale comes after the company carried out a stock sale for 10% of the firm in 2007, which became the largest initial public offering in Colombia.
The government, meanwhile, has a plan under review by Congress to sell another 10% stake in the firm, which could start next year and would be carried out in several tranches.