Ecopetrol Seen Crossing Finish Line

Ecopetrol is expected to successfully raise the COP2.5trn (1.4bn) it is targeting in its domestic equity follow-on, according to local brokers and analysts. The Colombian state-owned oil company closed books Wednesday after setting a COP3,700 per share price at launch on July 27. Global market turmoil during the sale period had raised concerns that demand for the 675.7m shares might not be enough to reach the target, particularly when Ecopetrol share price dropped below the offering price August 4. Government indications that it may sell additional shares as soon as next year may also have hurt demand. “The sale should be oversubscribed, though not by very much,” says a Bogota-based stock analyst following the sale, and estimating a COP2.5trn-COP3.0trn final book. As the sale was aimed at retail investors, the company has many small orders to tabulate. An Ecopetrol spokesman declined to comment on the demand, noting an indication should come from the company by Tuesday of next week. Local press had cited a radio interview with Ecopetrol’s president Tuesday saying books had passed COP2.0trn, and would comfortably pass COP2.5trn. Shares had resurfaced above the offer price earlier this week, but shed 3.0% Wednesday to close at COP3,595. Ecopetrol is down 10.0% on the year and 4.6% since the beginning of the offer period. Credit Suisse, JPMorgan and Bancolombia led the sale, placed through a group of local brokerages. The government has the ability to add shares to the sale if it chooses. The 675.5m shares represent 1.67% of Ecopetrol. The government is authorized to sell up to 9.9%, and has indicated it may look to begin offering additional pieces of this amount next year.