Ecopetrol, Colombia's state-run oil producer, has seen only tepid response to its $1.4 billion share offering, which is set to expire on Wednesday. The company has received orders for just 69% of the $1.4 billion offering, which is the largest share sale in the South American country in four years.
Analysts said the recent slide in global stock prices has tempered demand for the Ecopetrol (EC) offering with one analyst quoted by Bloomberg News saying the offering was going well until equity markets recent plunged.
Investors initially fretted that Ecopetrol would sell too big a stake when the offering was first announced, then the concern became that there would be too few institutional buyers for the shares. The offering has only been open to Colombian investors and laws there place limits on the percentage of an individual stock institutions can own. Many Colombian institutional investors were already close to their maximum allotment of Ecopetrol before the offering.
Ecopetrol is looking to raise cash for its $80 billion spending plan for the next decade. The company plans to increase output to 1 million barrels a day in 2015 and 1.3 million barrels a day in 2020, Bloomberg reported.