The Philippine unit of century-old Royal Dutch Shell plans to sell as much as P29.7 billion worth of shares through an initial public offering, enabling the oil firm to finally comply with a requirement of the Downstream Oil Industry Deregulation Act of 1998.
Based on its preliminary registration statement filed with the Securities and Exchange Commission, Pilipinas Shell Petroleum Corp. planned to offer up to 330 million primary and secondary shares to the public for as much as P90 per share.
If the company would go for the maximum amount of shares at the maximum price, it would be the biggest stock market debut in the Philippine Stock Exchange. It can potentially exceed the sizes of the three largest IPOs so far seen in the country completed by the following issuers: retailer Robinsons Retail Holdings Inc. (P28.11 billion in 2013), Sy family-led conglomerate SM Investments Corp. (P26.25 billion in 2005) and Cemex Holdings Philippines Inc. (P25.1B in 2016).
Of the total offering, Pilipinas Shell plans to offer up to 270 million secondary shares and 30 million in primary shares while 30 million shares are set as over allotment.
This stock market debut will bring 18.6 percent of the company’s post-IPO shares to public hands. This gives investors a new oil play aside from Petron Corp., which debuted in the exchange in 1994 and is now valued by the market at around P106 billion.
Pilipinas Shell has tapped JP Morgan as global coordinator and international book runner while BPI Capital Corp. was named domestic lead underwriter and domestic bookrunner. Rothschild was named financial adviser.
Pilipinas Shell expects to use proceeds from the primary shares offering to fund capital expenditure, working capital and general corporate expenses in the next two years.
The company intends to allot 69 percent of shares to offshore institutional investors while 30 percent is earmarked for local trading participants and small investors. The remaining 1 percent will be set aside for its employees.
The government has been prodding Pilipinas Shell to hold an IPO to meet the 10 percent minimum public ownership requirement of Republic Act 8479 for oil refining firms.
The Shell group of companies, which started operations in the Philippines in 1914, is into oil and gas exploration, production, oil refining, distribution and sales to consumers. It employs more than 3,000 people nationwide. Parent firm Royal Dutch Shell operates in more than 70 countries and territories. Doris Dumlao-Abadilla