Board of Colombia's Ecopetrol approves possible issue of shares

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The logo of Ecopetrol is pictured at its headquarters in Bogota, Colombia August 11, 2017. Picture taken August 11, 2017. REUTERS/Jaime Saldarriaga

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BOGOTA, Aug 27 (Reuters) - The board of Colombia's majority state-owned oil producer Ecopetrol (ECO.CN) on Friday approved the possible issuance of shares which could reduce the country's stake to a minimum of 80% over the next five years, the company said.

Colombia currently controls 88.49% of Ecopetrol, whose second-quarter net profit recently soared to some $970 million on strong sales and a weak comparative period. read more

Any money raised from the issuance of shares will be used to fund projects to boost organic growth, inorganic growth opportunities and debt reduction, the company said in a statement.

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"In development of a potential issue or issues which could take place under the program, the nation would maintain at a minimum 80% of the subscribed and circulating capital of Ecopetrol," the statement said.

"The program would be valid for five years, during which time Ecopetrol could carry out one or various share emissions with the specific aim of financing the execution of its corporate strategy and energy transition plan."

The board's approval does not oblige the company to issue shares, the statement added, and releases will depend on favorable market conditions.

Ecopetrol is Colombia's largest company. It produces most of the South American country's oil and owns its two most important refineries, as well as most of the pipeline network.

Earlier this month Ecopetrol agreed to buy the government's 51.4% stake in conglomerate ISA for some $3.7 billion, purchasing around 569.5 million ISA shares from Colombia's finance ministry.

The purchase was funded by a loan worth up to $4 billion with international banks.

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Reporting by Julia Symmes Cobb Editing by Chris Reese

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