Ecopetrol will probably issue new shares worth between 2 trillion and 3 trillion pesos ($1.14 billion to $1.71 billion), the Colombia state oil company’s president told a local financial daily.
The offering would be the largest issuance in the market of Latin America’s No. 4 oil producer this year, although foreign investors will not be allowed to participate. The sale is due to run between July 27 and Aug. 17.
“We’d be thinking of going out with an amount between 2 trillion and 3 trillion pesos, which is equivalent to around 2 percent of the value of the company,” Ecopetrol President Javier Gutierrez told the business newspaper Portafolio.
The company is authorized to sell shares that would represent a 9.9 percent interest, and analysts expect Ecopetrol to issue about a third of that amount, according to a Reuters poll of 10 local brokerages.
The company’s board will meet on Friday to decide on the amount it will issue. Colombia’s largest oil producer sold shares representing a 10.1 percent interest in 2007 and is authorized by the country to sell a total of a 20 percent interest.
Gutierrez said Ecopetrol would have a third issuance round which would be open to foreign investors for the remaining amount authorized by the government.
He gave no details on when that might be.
Ecopetrol was not immediately available to comment on the story.
Analysts say market conditions may not be the best for a large issuance, amid expectations of other big offerings from local companies during the third and fourth quarters.
The market’s big investors — pension funds — are already heavily invested in Ecopetrol’s stock and bonds, nearing the participation limits imposed by regulators, experts say.