Oil refiner Petron Corp. successfully raised P20 billion from the issuance of five-year and seven-year bonds while competitor Pilipinas Shell Petroleum Corp. started selling shares as a part of its planned initial public offering.
BDO Capital president Eduardo Francisco said in a text message demand for Petron’s bond offering was strong and the issue was many times oversubscribed.
Fransicso said the demand for Petron bonds was not affected by the ongoing IPO of Pilipinas Shell.
Offer period for Petron bonds offering ran from Oct. 13 to 19 while the offer period for Pilipinas Shells’ P19.5-billion IPO started Oct. 19 and will end on Oct. 25.
Petron issued P15 billion worth of five and seven-year bonds, with an oversubscription option for another P5 billion.
The five-year bonds due 2021 carry an interest rate of 4.0032 percent per annum, while the seven-year bonds due 2023 have 4.519 percent.
Petron said it planned to use a part of the proceeds to prepay amortizations due 2017 on dollar-denominated long-term debt worth P11.3 billion which was used to partly finance the $2-billion expansion of its refinery in Bataan.
The final amortizations on these floating-rate long-term loans are due May 2020 and July 2021.
Petron said it also intended to use a part of the proceeds to pay short-term loans extended by BDO Unibank Inc. incurred for working capital requirements amounting to P5 billion and maturing in November 2016 at an interest rate of 2.6 percent per annum. The balance of the proceeds will be used to pay for crude oil purchases.
Petron posted a consolidated net income of P5.3 billion in the first half of 2016, on higher sales volume, aggressive network expansion and improvement in production and cost efficiencies.
Consolidated sales volumes in the Philippines and Malaysia jumped 9 percent to 51.8 million barrels in the first half of 2016 from 47.4 million barrels sold in the same period in 2015.
Pilipinas Shell is pushing through with its planned IPO this year. The Oil Deregulation Law of 1998 requires oil refiners to list at least 10 percent of their shares in the local stock market.
