SEC oks Phoenix Petroleum’s P3.5B IOU offer

listing of Phoenix Petroleum’s follow-on shares on PSE

THE SECURITIES and Exchange Commission has approved a plan by petroleum distributor Phoenix Petroleum Philippines Inc. to raise up to P3.5 billion from the sale of short-term commercial paper (STCP).

STCP is an unsecured, short-term debt paper or IOU issued by a corporation, typically with maturity of less than one year, used for financing accounts receivable and inventories.

The SEC approved Phoenix Petroleum’s plan to issue these STCPs in three tranches. Proceeds will be used for working capital, more specifically, to purchase and import fuel and lubricant products by the first quarter of 2016.

This STCP offering comes soon after the oil company’s P2-billion capital-building through the recent follow-on offering of shares.
 
“I would like to congratulate Phoenix Petroleum Philippines, Inc. on its follow-on offering. The proceeds of this fund raising activity will support Phoenix Petroleum in its aggressive expansion program that includes the construction of additional retail stations nationwide and storage facilities in Cebu and General Santos,” PSE chair Jose Pardo in his welcome remarks during the listing ceremony on Friday.

Phoenix Petroleum is a leading independent oil company in the country. It is engaged in the business of trading refined petroleum products and lubricants, operation of oil depots and storage facilities, shipping/logistics and allied services.

The company has a network of 447 stations as of end-September. Of these, 222 are based in Mindanao, 62 in Visayas and 163 in Luzon. At least 3.5 million vehicles visit the Phoenix retail network monthly, based on company data.

Phoenix Petroleum has been expanding its logistics, storage and infrastructure to support network expansion and services to commercial and industrial clients.

In the first nine months, Phoenix Petroleum posted a consolidated net income of P758 million or a 49.95 percent growth year-on-year. This was driven by a 220.59 percent growth in net income in third quarter year-on-year and by the 29 percent year-on-year increase in sales volume of petroleum products for the first nine months. Despite a decline in the wholesale/distributor sales segment, the company said total sales to commercial accounts – primarily to the shipping, fishing, mining, power and transportation sectors – registered continued growth during the year.