Petron sets P 18-B bond offering

Petron Corp. is offering P18 billion in four-year and six-year fixed-rate bonds, the first tranche of a P50-billion shelf registration recently approved by the Securities and Exchange Commission.

On offer until Oct. 5, the bonds are intended for listing on Oct. 12 in the Philippine Dealing and Exchange Corp.

Proceeds from the issuance—expected at a net of P17.78 billion—are earmarked for the redemption of P13 billion in five-year retail bonds that are maturing on Oct. 27 as well as amortization for existing bilateral long-term facilities extended by BDO, Bank of the Philippine Islands and Union Bank totaling P1.48 billion.

Also to be funded is the construction of a new 44-megawatt power plant in Petron’s refinery complex in Bataan.

The power plant will add to the existing power generation capacity of 140 MW at the refinery and is designed to generate power and steam needed by the refinery using petcoke instead of fuel oil.

Petcoke, a solid by-product of crude oil refining, is less expensive than fuel oil.

The total cost of the new power plant was estimated at P11 billion to P12 billion. Of this amount, P3.3 billion will be funded with the proceeds of the offer while the remaining P7.7 billion to P8.7 billion will be sourced from Petron’s internally generated funds.

“Construction of the power plant commenced in [the first semester of 2019] and is about 90 percent complete,” Petron said.

“The project is expected to be completed and operational in the second half of 2022 after testing, synchronization and precommissioning activities,” the company added.

—Ronnel W. Domingo INQ