Pilipinas Shell to use P19.5-B IPO money to grow business operations

Pilipinas Shell Petroleum Corp. on Tuesday said the proceeds from its P19.5-billion maiden share sale will finance the company’s depot expansion plans.

The company on Tuesday launched its initial public offering (IPO).

“We will continue to invest in our marketing business. We are an integrated business invested to ensure that our depots are effective. We are looking at ways of improving refinery and developing new products there,” Cesar G. Romero, incoming president and chairman of Pilipinas Shell said in a briefing in Taguig City.

Romero noted some 10 percent of the proceeds from IPO will be used within the first three years of operations of the company as a publicly listed firm.

The company plans to expand the number of its outlets to 1,200 by 2020 from 966 at present.

“Our retail expansion continues. We want to make sure that whatever growth we have in marketing is adequately supplied,” Romero said, noting the number of stations will increase at a yearly rate of 50 to 70.

“We make sure every station we put up genuinely makes money,” he added.

The company expects to raise as much as P19.5 billion from the IPO by selling up to 291 million shares at P67 apiece. The listing on the Philippine Stock Exchange (PSE) is set on November 3.

Out of the total offering, some 27.5 million common shares will be available for local small investors (LSI). Under the LSI program, individual investors can purchase as much as P100,000 worth of shares from the usual P25,000.

“For LSI applications, each individual investor may apply to purchase at least 100 shares and increasing increments of 10 shares thereafter, and a maximum of 1,490 shares,” the company said in a separate statement.

Oversubscription option

The bulk or 90 percent of the IPO consists of 247.5 million secondary shares, the remaining 10 percent or 27.5 million primary shares will be sold by shareholders Shell Overseas Investments BV, The Insular Life Assurance Company Ltd., and Spathodea Campanulata Inc.

The share sale carry an option to offer up to 16 million more shares, also by the selling shareholders, in case the IPO is oversubscribed.

Pilipinas Shell is the third company to go public so far this year, following Golden Haven Memorial Park Inc. in June and Cemex Holdings Philippines Inc. in July.

The stock exchange has so far Around P91 billion worth of capital has been raised so far from the stock exchange, including P778 from Golden Haven and P25.1 billion from Cemex .

The other companies planning to list on the PSE are TVI Resource Development (Philippines) Inc. (P1.66 billion), Pointwest Technologies Corp. (P2.21 billion), Green Power Panay Philippines Inc. (P222.8 million), Audiowav Media Inc. (P2.66 billion), Shakey's Pizza Asia Ventures Inc. (P5.5 billion), and Xeleb Technologies Inc. (P736.60 million.

Pilipinas Shell reported a net income of P4.886 billion in the first six months of the year.

“There’s a lot of optimism as far as the business community is concerned. The previous administration has put in place a lot of good things and the current administration is building on this,” Outgoing Pilipinas Shell President and Chairman Edgar O. Chua said.

“The underlying performance of the business is very good. Macroeconomic fundamentals – the GDP (gross domestic product) of the country is growing,” he said.

The Philippine economy grew by 7 percent in the first six months of the year, the fastest in over two years. — VDS, GMA News