Pilipinas Shell sets P30B stock debut

THE PHILIPPINE unit of century-old Royal Dutch Shell plans to sell as much as P29.7 billion worth of shares via an initial public offering, executing a much-awaited stock market debut mandated by the downstream oil industry deregulation law of 1998.

Based on its preliminary registration statement filed at the Securities and Exchange Commission, Pilipinas Shell Petroleum Corp. seeks to offer up to 330 million primary and secondary shares to the public for as much as P90 per share.

If the company is able to issue the maximum amount of shares at the maximum price, it will be the biggest stock market debut seen in the history of the Philippine Stock Exchange. The three largest IPOs so far in this market were completed by the following issuers: retailer Robinsons Retail Holdings Inc. (P28.11 billion in 2013), Sy family-led conglomerate SM Investments Corp. (P26.25 billion in 2005) and Cemex Holdings Philippines Inc. (P25.1B in 2016).

Of the total offering, Pilipinas Shell plans to offer up to 270 million secondary shares and 30 million in primary shares while 30 million shares are set as overallotment.

This stock debut will bring 18.6 percent of the company’s post-IPO shares to public hands.

The company has tapped JP Morgan as global coordinator and international book runner for this offering while BPI Capital Corp. is mandated as domestic lead underwriter and domestic bookrunner. Rothschild was named as financial adviser.

Pilipinas Shell expects to use proceeds from the primary shares offering to fund capital expenditure, working capital and general corporate expenses for the next two years.

By IPO allotment, the company intends to allot 69 percent of shares to offshore institutional investors while 30 percent is earmarked for local trading participants and local small investors. The remaining 1 percent will be set aside for its employees.

The government has been prodding Pilipinas Shell to embark on an IPO to meet the minimum of 10 percent public ownership required by Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998 for oil refining firms.