Phoenix redeems P1.25B in preferred shares, settles P3B in IOUs
Following an expansion binge over the past several years, Phoenix Petroleum Philippines Inc. has embarked on a “capital light” expansion strategy alongside a comprehensive financial management program as it eyes recovery from the pandemic.
This was announced as the Davao City-based independent oil firm refinanced a total of P4.25 billion in transactions, through the redemption of P1.25 billion in preferred shares and the settlement of P3 billion in short-term commercial paper this month.
The first is expected to generate savings on cost capital and the latter is intended to relieve pressure on immediate cash resources. According to Phoenix, it took major steps to strengthen its balance sheet as the challenges of the pandemic lingered. “It has been a turbulent year, but we have been making headways in our engagements with creditors, and are ending the year with renewed strength and positivity,” Phoenix president Henry Albert Fadullon said in a statement.
“We are making significant progress in ensuring the Company’s long-term viability as a business to come out a healthier and stronger enterprise after this pandemic,” Fadullon said. He said this month’s transactions were initial steps in assuring financial partners of Phoenix’s resolve to deliver on their commitments. Further, the financial management program is supported by a capital light expansion strategy that focuses on strategic partnerships and an integrated franchising model across its fuel and LPG products, convenience stores and payments.
Phoenix is “on track” to be in the black in 2020, having so far generated at least P800 million in savings on operational expenses and P1.5 billion in savings on capital expenses.
The company reported a net income of P5 million for the third quarter of this year.
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