PETRON Corp. said on Wednesday that its executive committee had authorized the company to offer and issue dollar-denominated senior notes for up to $500 million, with the proceeds to be used for debt repayment and to partly fund a power plant project.
In a stock exchange disclosure, the country’s largest oil company said the net proceeds of the notes issuance, after the deduction of commissions and estimated offering expenses, will be applied “for the repayment of indebtedness and for the partial financing of the power plant project.”
Petron, which operates the only integrated oil refinery in the Philippines, said its management had yet to determine the terms and conditions of the notes offering.
In its preliminary offering circular, Petron said it is constructing new power plant facilities and structures in its Bataan refinery that will replace some of its old generators, increase steam production, and expand power generation capacity from 140 megawatts (MW) to 184 MW.
“The estimated total cost of the project is approximately P11 billion to P12 billion. Construction of the new power plant facilities commenced in the first half of 2019 and is expected to be completed in the second half of 2022,” it said.
It said the power plant generates power and steam required by the refinery using petcoke as feedstock, which is not as costly as fuel oil. It added that products previously used as refinery fuel will be converted to high-value products.
Petron refines crude oil and markets and distributes refined petroleum products in the Philippines and Malaysia with a combined refining capacity of 268,000 barrels per day (bpd).
Petron Bataan Refinery in Limay, Bataan is a full conversion refinery with a crude oil distillation capacity of 180,000 bpd, processes crude oil into a range of white petroleum products such as naphtha, gasoline, diesel, liquefied petroleum gas, jet fuel, kerosene, and petrochemical feedstock such as benzene, toluene, mixed xylene and propylene.
Petron reported an attributable net income of P4.42 billion as of the third quarter of 2021, a reversal of the P12.44-billion net loss in the same period a year earlier.
On Oct. 12 last year, the company issued P18-billion retail bonds divided into Series E due in 2025 (P9 billion) and Series F due in 2027 (P9 billion) with interest rates of 3.4408% per annum and 4.3368% per annum, respectively. The bonds are listed on the Philippine Dealing & Exchange Corp.
On Oct. 27, it fully paid its P13-billion Series A retail bonds issued on Oct. 27, 2016.
On Nov. 3, Petron redeemed its 2,877,680 Series 2B preferred shares issued on Nov. 3, 2014 at a redemption price of P1,000 per share.
At the local bourse, Petron gained nine centavos or 2.77% on Wednesday to close at P3.34 apiece.