MANILA, Philippines--Petron Corp, the country's biggest oil refiner and retailer, said it has set at P100 apiece the price of the preferred shares it plans to issue starting next week to raise as much as P10 billion in fresh capital.
In a memorandum posted at the Philippine Stock Exchange, Petron also said that it has set the dividend rate on the proposed preferred shares at 9.5281 percent a year.
The oil company targets to issue 50 million perpetual preferred shares. The offer size may be increased by another 50 million shares. The offer period will start on Feb. 15 and end on Feb. 26. The shares are scheduled for listing on the local bourse on March 5, the company earlier reported.
Proceeds from the preferred share issuance will be allocated for the company?s expansion program as well as for the repayment of short-term debts.
Should it be able to raise the full P10 billion, Petron plans to allocate about P5 billion for the construction of a power plant.
The power facility, which will be put up within the company?s refinery compound in Limay, Bataan, will meet Petron?s growing steam and power requirements. Construction of the power plant is scheduled to begin this year and is expected to be completed by 2012, it said.
It also plans to earmark P3.9 billion for the repayment of short-term debts and another P1 billion for its retail market expansion this year.
The oil company has programmed to spend about P1 billion a year for its retail expansion over the next five years.
As of end-January this year, Petron said it has completed the first phase of its retail network expansion program, which saw the construction of 200 service stations over a 12-month period.
The 200 stations?constructed from January 2009 to January 2010 brought the oil company?s total service station count to 1,463?the biggest retail network in the industry, Petron claimed.
?We intend to pursue our network expansion program to bring Petron?s fuel products and services closer to Filipino motorists,? said Petron chair and CEO Ramon S. Ang.
?This is also in line with our strategic initiative to strengthen the company?s core business and ensure our market dominance over the long term,? Ang added.
Of the 200 Petron service stations opened last year, 84 are in Luzon, 48 in the Visayas and 68 in Mindanao.
At the heart of the company?s expansion program is the establishment of Petron service stations in far-flung areas as the framework for volume building.
?The concept is based on pre-fabricated models that can start with two- to three-product pumps but easily expandable as demand increases in growth centers, real estate development sites and provincial areas.