Newly listed Pilipinas Shell Petroleum Corp. is allocating P18.36 billion in capital expenditures over the next five years to build new retail service stations and upgrade the Tabangao Refinery in Batangas City.
Pilipinas Shell said in a final prospectus filed with the stock exchange it would spend P12.8 billion from 2016 to 2020 for the planned turnaround and upgrade of the Tabangao Refinery, the establishment of new supply and distribution sites and the improvement of existing supply and distribution sites.
“Capital expenditures for manufacturing and supply principally relate to the planned turnaround and upgrade in 2017 of the Tabangao Refinery to enable production of bitumen, and revamp in 2018 and 2019 of the Tabangao Refinery’s catalytic cracking reformer to a continuous reformer,” Pilipinas Shell said.
The oil refiner and distributor also budgeted nearly P5 billion over the next five years for the rollout new service stations. The company said from 966 Shell-branded retail service stations as of end-June 2016, it planned to have 1,220 stations by 2020.
“The company expects to fund the planned capital expenditures indicated above using cash generated from operations, existing cash and the proceeds of the offer,” the oil refiner said.
Share price of Pilipinas Shell rose 0.3 percent on its debut Thursday, bucking the market’s downturn, closing at P67.20 per share from its IPO price of P67 apiece.
“We are delighted with the overwhelming response received by Pilipinas Shell Petroleum Corp. from investors globally and see it as a vote of confidence in the future of the company and its leadership,” Pilipinas Shell’s newly appointed country chairman Cesar Romero said.
Shell, the third company listed with the Philippine Stock Exchange this year, raised P18.45 billion in IPO proceeds which would be increased to P19.49 billion once the over allotment option was exercised.
BPI Capital managing director and chief operating officer Reginaldo Anthony Cariaso said the company had 30 days from its listing to exercise the overallotment option.
Cariaso said Shell was a strong candidate for inclusion in the 30-company Philippine Stock Exchange index because of its large market capitalization and public float.
“It’s also a very good indicator for the overall Philippine economy,” Cariaso said.
BPI Capital is the domestic lead underwriter and bookrunner for the IPO while JP Morgan acted as global coordinator and international bookrunner.
With the IPO, Pilipinas Shell met the provision of the Downstream Oil Industry Deregulation Code Act of 1998 requiring entities engaged in the oil refinery business to offer at least 10 percent of its common stock to the public and list on an exchange.
