Petron to raise funds via bond offering

Leading oil refiner and distributor Petron Corp. plans to raise as much as P40 billion through an offering of fixed rate bonds within the next three years, proceeds from which will be used to refinance debt and cover working capital requirements.

The first tranche of the bonds to be offered will be worth as much as P20 billion. The base amount is proposed at P15 billion, with an oversubscription option of up to P5 billion.

In a prospectus dated Aug. 22 filed with the Securities and Exchange Commission, the bonds are proposed for shelf registration, which allows an issuer to register and sell under the same prospectus and other regulatory filing requirements a certain volume of securities that the issuer does not intend to use up right away.

Shelf registration is crucial in finding good timing for a securities issuance especially when financial markets are volatile. This allows the issuer to complete all the tedious paperwork and lay the groundwork for a future issuance and immediately go to market as soon as conditions become favorable.

Petron intends to have the bonds listed and traded at the local fixed income trading platform Philippine Dealing & Exchange Corp.

The oil refining arm of conglomerate San Miguel Corp. chalked up a consolidated net income of P5.3 billion in the first half, marking a 55-percent increase from year-ago level. This was attributed to a surge in sales volumes, aggressive network expansion, improved production and cost efficiencies as well as focused customer-centric campaigns. Doris Dumlao-Abadilla