Corporate News

PetroEnergy to raise P1 billion via stock rights offer

Posted on July 28, 2017

PETROENERGY Resources Corp. plans to raise P1 billion through a stock rights offering to raise capital mainly for a number of energy projects in the pipeline, the company told the exchange on Thursday.

“We’re looking at raising additional capital by P1 billion. We hope to finish that maybe around the third quarter of this year,” Francisco G. Delfin, Jr., PetroEnergy vice-president, told reporters.

He explained the amount would account for the equity portion of the capital needed for expansion as well as new projects in the next two to three years.

During PetroEnergy’s briefing for investors in June, company officials had said the power generation projects have a total price tag of P6.75 billion.

“Our equity portion for that project [cost] is about P1 billion. The balance of that will come from loans,” Mr. Delfin said.

In its disclosure on Thursday, the company said other details of the offering, which gives shareholders the right to buy more PetroEnergy shares, “will be announced as soon as determined.”

That right is usually proportional to their existing stake. PetroEnergy is chaired by Yuchengco family matriarch Helen Y. Dee, while her sister Yvonne S. Yuchengco is a board director.

“We’re still studying everything,” said Carlota R. Viray, PetroEnergy assistance vice-president for finance.

She previously said that the company was looking to secure bank loans for 75% of the project cost. The 25% equity is roughly P1.69 billion.

PetroEnergy is expanding its 50-megawatt (MW) solar project in Central Technopark in Tarlac City by another 49 MW. The expansion, which the company calls Tarlac-2, is expected to cost P2.4 billion.

Also in the lineup is the P1.6-billion, 14-MW expansion of the 36-MW wind farm in Nabas-Malay, Aklan.

The company is also planning a 5- to 10-MW solar power project in Puerto Princesa, Palawan, which has a battery storage component, at a cost of P855 million.

Up for expansion by 12-MW is the 20-MW geothermal power plant in Sto. Tomas, Batangas under subsidiary Maibarara Geothermal, Inc. (MGI).

PetroEnergy previously said Maibarara-2 had reached financial close as banks agreed to lend 30% of the P1.9-billion project cost after PetroEnergy secured a power supply agreement with Phinma Energy Corp.

MGI, which operates the facility, is a joint venture of PetroGreen Energy Corp., Phinma Energy and PNOC Renewables Corp. with a stake of 65%, 25% and 10%, respectively. PetroGreen is a subsidiary of publicly listed PetroEnergy.

PetroEnergy President Milagros V. Reyes previously said that the company was projecting a 33% increase in its net income this year.

With last year’s $5.8-million project, the income projection places 2017’s net at $7.7 million. PetroEnergy reports its financial data in dollars for ease in accounting for its overseas oil revenues.

In the first half, income reached $6.55 million, nearly three times more than the $2.34 million posted in the same period last year. -- Victor V. Saulon