Pilipinas Shell Petroleum Corp. has secured the approval of the board of parent company Royal Dutch Shell Plc which is based in the Netherlands to hold an initial public offering this year, a government official said Wednesday.
“[Pilipinas Shell’s] IPO, definitely this year. The Shell board approved the IPO,” Energy Secretary Zenaida Monsada told reporters.
Shell is the country’s second largest oil refiner and distributor. It owns a refinery in Batangas province which has a capacity of 110,000 barrels per day. The upgraded refinery now produces Euro-4 compliant fuels.
Monsada said she was informed by Shell country chairman Ed Chua of the latest development. Shell submitted the IPO plan to the Energy Department Tuesday.
“As to when it will be implemented, it depends on how fast the process will be. There’s still a process with SEC [Securities and Exchange Commission],” Monsada said.
Shell’s planned IPO is in compliance with the Oil Deregulation Law of 1998, requiring oil refiners to list at list 10 percent of their shares in the local bourse.
Shell’s IPO has been delayed for more than a decade as the company cited unfavorable market conditions, low oil prices and regulatory issues in the previous years.
Monsada said Shell was looking at several factors prior to moving forward with the IPO such as market timing and company profitability.
Monsada earlier said Shell would likely push through with the IPO in the last quarter of the year.
“They already have a transaction adviser, a long time ago. But they don’t have specific [timetable for the IPO],” Monsada said.
Shell corporate communications manager Cesar Abaricia confirmed the company was preparing for an IPO in accordance with its obligations under the the downstream oil industry deregulation Act.
“The nature and timing of the IPO is still being determined,” Abaricia said.
Chua said the company would “wait and see the environment” before conducting the IPO. He said proceeds from the planned IPO would be used for “growth projects,” which he did not identify.
Chua said in December the company was studying whether it could offer more than 10 percent of its shares to the public.
“The minimum [public float] required by law is 10 [percent of total shares], but we will see if 10 [percent] is good or we should do more. It’s not yet final,” he said.
