MANILA, Philippines—Petron Corp., the country’s biggest oil retailer and refiner, targets to raise P5 billion through a primary offer of up to 60 million preferred shares.

In a registration statement recently submitted to the Securities and Exchange Commission, Petron said the preferred share issuance has an oversubscription option of up to 40 million preferred shares.

An application has likewise been filed for the listing of the preferred shares with the Philippine Stock Exchange.

According to Petron, the preferred shares are non-voting and non-convertible with a par value of P1 each and are redeemable at the option of the company.

“The preferred shares will also have preference over common shares in the case of the dissolution of the company,” Petron added.

Last Oct. 21, Petron’s board of directors reclassified 624.89 million unissued common shares to preferred shares subject to shareholder approval. As of Sept. 30, the company had an authorized capital stock consisting of 10 billion common shares with a par value of P1, of which 9.38 billion shares were issued and outstanding.

“The proceeds from the preferred share issuance will be mainly used for capital expenditures for the company’s refinery operations and the expansion of its retail network,” Petron president Eric O. Recto said in a statement.

Petron has been raising funds for several expansion projects aimed at increasing its retail network and improving output at its 180,000-barrel-per-day Bataan refinery, the upgrading of which is expected to cost $1 billion.

Over the past few years, Petron has invested more than $400 million at its Bataan refinery to ensure the local production of Clean Air Act-compliant fuels and boost the country’s economy through the domestic manufacture of petrochemical feedstock.

For the next three years, Recto said the company targets to put up some 1,000 micro filling stations. Another project is the construction of additional refinery units, including a second petro fluidized catalytic cracking unit (PetroFCC 2) that will enable the full conversion of residual products to more valuable gasoline, diesel, LPG and propylene.

Just last May, Petron issued fixed-rate corporate notes amounting to P10 billion to raise funds.

The issue, one of the largest corporate note issuances in the history of local debt capital markets, was more than three times oversubscribed.

Continuing its strong recovery from losses suffered in 2008, Petron posted a net income of P3.37 billion in the first nine months of 2009. This is equivalent to a 21-percent increase compared to the P2.78 billion income posted in 2008 over the same period.