The Philippine Stock Exchange (PSE) has given Petron Corp. the green light to sell P17 billion worth of shares to its investors, which would allow it to expand its crude oil inventory.
In a notice on Thursday, the PSE said the Ramon Ang-led company had planned to offer up to 13-million series-4 preferred shares at P1,000 each. An additional 4 million shares may also be tapped in case of high demand.
A publicly listed company usually sells more shares, through a follow-on offering, to raise additional capital.
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Based on Petron’s Aug. 28 preliminary prospectus, the shares will be offered from Sept. 5 to Sept. 13, with listing scheduled on Sept. 23.
BDO Capital and Investment Corp. will be the sole issue manager for the offer. It will also be joint lead underwriter and bookrunner alongside Bank of Commerce, China Bank Capital Corp., Philippine Commercial Capital Inc., PNB Capital and Investment Corp. and SB Capital Investment Corp.
The sale represents the second tranche of Petron’s shelf program covering 50 million shares.
A company seeks a regulator’s approval to sell securities or equities with a plan to dispatch these, usually in tranches, at a later date when the need arises. In the case of Petron, it sold 12.5 million shares in July last year, raising P14 billion.
Obligations
“The net proceeds of the offer shall be used to redeem the series 3A preferred shares, refinance maturing obligations and fund general corporate purposes, including the purchase of crude oil inventory,” the prospectus read.
Petron currently supplies around 40 percent of the country’s total fuel requirements through its refinery in Limay, Bataan province.
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The facility is the country’s largest refinery, with a production capacity of 180,000 barrels per day.
Volatile oil prices and the weakness of the local currency against the US dollar caused a slight dip in Petron’s first-semester earnings. Its net income during the period declined by 2 percent to P6 billion, while revenues jumped by a fifth to P444.5 billion.
Sales volume reached 69.1 million barrels, up by 20 percent versus the same period last year.
Petron currently has around 2,600 service station outlets.