Pilipinas Shell says no IPO stabilization shares distributed overseas

No stabilization shares of Pilipinas Shell Petroleum Corp. were distributed overseas when the company listed on the Philippine Stock Exchange last month, the company said on Friday.

In a regulatory filing with the Securities and Exchange Commission (SEC), the oil company cited a report by BPI Capital Corp., its IPO lead underwriter.

"Based on said report, no international distribution of the stabilization shares was made," the company told the regulator.

The practice of using stabilization shares is to "help stabilize the stock price after the listing of an IPO in accordance with the SEC rules on stabilization," BPI Capital Managing Director Reginald Cariaso told GMA News Online.

"It's a standard market practice," Cariaso said.

Pilipinas Shell disclosed to the Philippine Stock Exchange that the filing with the SEC was in line with the approval issued by the regulator's Market and Securities Regulation Department on September 21.

"No international distribution of the stabilization shares have been made, and pursuant to the terms of the Greenshoe agreement, the stabilization shares that have been acquired from the market have been conveyed to the selling shareholders – Shell Overseas Investments BV, The Insular Life Assurance Company Ltd., and Spathodea Campanulata Inc.," BPI Capital reported.

Stabilization activities were conducted from November 3 to December 2, the underwriter noted.

Underwriters use the stabilization share or overallotment option keep the price of a security stable after an IPO, in case the issue is oversubscribed.

During its maiden share sale, Pilipinas Shell offered 291 million shares at P67 apiece.

The bulk or 90 percent of the IPO consists of 247.5 million secondary shares, the balance of 10 percent or 27.5 million primary shares were sold by shareholders Shell Overseas Investments, The Insular Life, and Spathodea Campanulata.

The Pilipinas Shell IPO carried an option to offer up to 16 million more shares, also from the selling shareholders, in case the IPO was oversubscribed. — VDS, GMA News