THE Securities and Exchange Commission (SEC) has given the green light for Petron Corp. to offer perpetual preferred shares worth up to P20 billion.
“(The company) received (on May 31) from the SEC the order rendering effective the registration statement for the registration of the Company’s perpetual preferred shares series 3, with an aggregate principal amount of P15 billion and an oversubscription option of up to P5 billion, and the corresponding Certificate of Permit to Offer Securities for Sale,” Petron told the stock exchange.
Petron has set the annual dividend rate for its P20-billion preferred shares offering at 6.8713% for 5.5-year shares and 7.1383% for seven-year shares.
In a final prospectus dated May 30, Petron said the offering will consist of 15 million perpetual preferred shares Series 3 with an oversubscription option of up to five million perpetual preferred shares priced at P1,000 each.
The Series 3A preferred shares will be redeemable 5.5 years after their issuance, while Series 3B preferred shares may be redeemed after seven years.
The company noted that the preferred shares are not convertible into common shares, and will not be given any further dividends beyond than what is stated above.
The preferred shares will also have “preference over holders of common stock in the distribution of corporate assets in the event of dissolution and liquidation of the company,” among other rights and privileges.
The shares are being offered from June 3 to 18, with listing at the Philippine Stock Exchange scheduled for June 25.
Petron expects to net P19.84 billion from the offering, should it fully exercise the oversubscription option. Proceeds will be used for the redemption of the company’s outstanding Series 2A preferred shares, the repayment of outstanding short-term loans, and other general corporate purposes.
Petron engaged BDO Capital & Investment Corp., BPI Capital Corp., Chinabank Capital Corp., and PNB Capital as the offering’s joint issue managers, joint lead underwriters, and joint bookrunners.
First Metro Investment Corp. has also been tapped as co-lead underwriter.
Petron’s net income attributable to the parent dropped 80% to P1.11 billion in the first quarter of 2019, amid a four percent decline in gross revenues to P124.56 billion. The company attributed the slowdown to lower sales volume posted by Philippine operations following the implementation of the Tax Reform for Acceleration and Inclusion law.
The company operates over 3,000 stations in the Philippines and Malaysia, after opening 40 new outlets during the quarter. It targets to add 300 stations until 2022 to continue expanding its operations.
Petron has committed to spend more than $1 billion for its expansion plans this year, including the construction of two stream boilers in its refinery in Limay town, Bataan. With a production capacity of 180,000 barrels per day, the Bataan facility supplies about 30% of the country’s total fuel requirements.
The company held a market share of 28.5% of the Philippine oil market as of end-2018, based on sales volumes and industry data from the Department of Energy.
Shares in Petron were unchanged at P6.12 each at the stock exchange on Monday. — Arra B. Francia