Pilipinas Shell to raise P29.7B through IPO


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Pilipinas Shell to raise P29.7B through IPO
Under the mandate of the Oil Industry Deregulation Act of 1998, Shell’s IPO should have been completed by 2002

MANILA, Philippines – Pilipinas Shell Petroleum Corporation plans to raise as much as P29.7 billion through initial public offering (IPO), which could be one of the largest maiden share offerings in the country.

Documents filed with Securities and Exchange Commission (SEC) showed Pilipinas Shell – the local unit of Royal Dutch Shell PLC – will sell up to 300 million primary and common shares and with over allotment option of up to 30 million shares at an offer price of up to P90 per share in November this year.

Out of the 300 million firm offer shares, 270 million are secondary shares to be sold by selling shareholder, including Shell Overseas Investments BV, the Insular Life Assurance Company Limited, and Spathodea Campanulata Incorporated. Only 30 million of those are primary shares.

The offer shares represent 18.6% of the company’s outstanding capital stock. (READ: Shell takes Malampaya tax dispute vs PH to int’l arbitration body)

The oil firm hired JP Morgan as the global and international book runner, while BPI Capital Corporation is the domestic lead underwriter and domestic book runner.

Rothschild, meanwhile, has been tapped to be the financial adviser. (READ: Pilipinas Shell IPO to happen soon?)

Offer period for the IPO has been tentatively set on October 26 to November 3, while listing date has been set on November 10.

Pilipinas Shell’s planned share sale is in compliance with the Oil Deregulation Law of 1998, requiring oil refiners to list 10% of their shares in the local stock market.

Under the law, Shell’s IPO should have been completed by 2002. (READ: Shell IPO late by 12 years now – DOE)

During the 2007 Asian financial crisis, Pilipinas Shell cited the volatile stock market as a reason for its reluctance to do an IPO then.

The oil firm’s IPO, however, has managed to delay for more than a decade the mandated share sale due to unfavorable market conditions, low oil prices, and regulatory issues in the previous years.

In terms of volume of fuel sold, Pilipinas Shell had the second largest overall market share of the domestic retail fuel market at approximately 29%, based on industry data.

As of end-June 2016, it has 996 retail service stations across the Philippines.

Pilipinas Shell owns a 110,000-barrel-per-day refinery in Batangas, which recently underwent an upgrade to deliver Euro 4 compliant fuels.

It is one of the only two integrated refining and marketing companies in the Philippines.

Pilipinas Shell will be the third company to conduct an IPO this year. The first two were Golden Haven Memorial Parks Incorporated and Cemex Holdings Philippines Incorporated.

Among the largest IPOs conducted in the PSE to date include Robinsons Retail Holdings Incorporated, Sy family-led conglomerate SM Investments Corporation, Cemex Holdings, and Cebu Air Incorporated. – Rappler.com

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