Oil refiner Petron Corp. is aiming to raise up to P10 billion through a preferred share offering to fund a programmed expansion.
In a registration statement filed with the Securities and Exchange Commission (SEC) Friday, Petron said it was offering 30 million to 60 million preferred shares with an oversubscription option of between 20 million and 40 million shares at P50 to P100 apiece.
“The proceeds from the preferred share issuance will be mainly used for capital expenditures for the company’s refinery operations and the expansion of its retail network,” Petron president Eric O. Recto said.
Petron said it may also use proceeds to prepay short-term debt or invest in special savings or other short-term money market instruments. As of end-September 2009, the company had consolidated short-term debt of P45.6 billion.
Petron said the preferred shares will be listed on the first board of the Philippine Stock Exchange (PSE).
BDO Capital & Investment Corp., BPI Capital Corp. and ING Bank N.V. (Manila branch) will be the joint lead managers and bookrunners for the issue.
The preferred shares are non-voting and non-convertible with a par value of P1 each share and are redeemable at the option of the company.
In May this year, Petron also issued P10 billion worth of five-year and seven-year fixed-rate corporate notes. The issue, one of the largest corporate note issuances in the history of local debt capital markets, was more than three times oversubscribed.
Petron is the market leader in the domestic oil industry with an overall market share of 36.4 percent as July 2009. It has the biggest refining capacity, most extensive distribution network and most number of service stations.
Petron has a capacity of 180,000 barrels per day and supplies nearly 40 percent of the Southeast Asian country’s fuel requirements.
In the past few years, Petron has invested more than $400 million in its refinery to ensure the local production of Clean Air Act-compliant fuels.
In the nine months ending September this year, Petron reported a 21 percent growth in net income to P3.37 billion from only P2.78 billion the previous level. Total assets stood at P117.1 billion while stockholders’ equity was at P36.3 billlion.
As of September 30, 2009, Petron had a total market capitalization of P47.8 billion.
San Miguel Corp. has an exclusive option until December 2010 to buy a 50.1 percent stake in Petron from British investment firm Ashmore Group as it moves into heavy industry from its core food and drinks business.