Small investors get a third of Shell IPO

Pilipinas Shell Petroleum Corp. is opening today the small investor portion of its P19.5-billion initial public offering.

Pilipinas Shell, which launched the country’s second-biggest IPO this year after Cemex Holdings Philippines Inc.’s P25-billion offer, is selling 27.5 million shares to local small investors and 55 million shares through Philippine Stock Exchange trading participants at P67 per share.

The offer period will run through Oct. 25.

The retail offer accounted for about a third of the total deal size, which was mainly allocated to “high-quality” long-term local and international investors, Reginaldo Cariaso, managing director of domestic underwriter BPI Capital, said Tuesday.

The company, which would have a public float of about 17.3 percent,  makes its trading debut on Nov. 3 under the trading symbol “SHLPH.”

Its post-IPO market value was seen at P112.6 billion, larger than Petron’s P98.4 billion, as of Tuesday’s close.

“The underlying performance has been very good. If you look at the macro performance [of the Philippines] GDP has been growing,” Edgar Chua, outgoing Pilipinas Shell chair and president, said during a press briefing. He will be replaced by Cesar Romero.

The company said 10 percent of the IPO was in the form of new shares, all the rest were secondary shares being sold by Shell Overseas Investments BV, The Insular Life Assurance Co. Ltd, and Spathodea Campanulata Inc. There was also an over allotment option of 16 million shares.

Net proceeds from the offer would be used mainly for the company’s capital spending, including its retail network expansion to 1,200 stations by 2020. As of June this year, it had 966 Shell-Group branded stations, 60 percent are in Luzon.

Currently, 81 percent of the total main fuels sold by Pilipinas Shell was supplied by its Tabangao Refinery in Batangas. Tabangao is one of only two refineries in the Philippines and has a nameplate capacity of 110,000 barrels per day.

The company’s IPO was aimed at complying with the oil deregulation law in 1998, which required oil refiners to list at least 10 percent of their shares in the local market.

Chua said the long delay was due to uncertainties over investment decisions, mainly on whether the Shell Group wanted to continue refining operations in the Philippines.

“It was only in 2015 when we got the support of the shareholders,” Chua said.