Pilipinas Shell lowers offer price for IPO

Pilipinas Shell lowers offer price for IPO
Thomson Reuters says the oil refiner's indicative offer price is now at P64 to P70 per share, from P90

MANILA, Philippines – Pilipinas Shell Petroleum Corporation lowered its indicative offer price for its planned initial public offering (IPO) next month.

Thomson Reuters publication IFR reported that the company’s indicative offer price is now at P64 to P70 per share, from P90.

Based on the new offer price range, Pilipinas Shell will raise between P21.12 billion and P23.1 billion in proceeds.

A source from Pilipinas Shell also confirmed the new price range offer. (READ: Shell IPO late by 12 years now – DOE)

The final announcement of its offer price is set for October 13.

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

Pilipinas Shell earlier secured regulatory approvals from the Securities and Exchange Commission as well as the Philippine Stock Exchange to conduct its maiden share offering.

The company will offer 300 million shares to the investing public and another 30 million to cover overallotment. 

These represent 18.6% of its outstanding capital stock.

Of the 300 million primary shares, 270 million shares will be sold by the selling shareholders, which include Shell Overseas Investments BV, The Insular Life Assurance Company Limited, and Spathodea Campanulata Incorporated. 

The remaining 30 million are primary shares and the proceeds from which will be used to finance capital expenditures, working capital, and general corporate expenses.    

Network expansion

From the current 996 service stations as of end-June 2016, Pilipinas Shell said it aims to expand its retail network to 1,220 service stations by 2020.

At least 69% of total offer shares will be sold to foreign investors and cornerstone investors, while 30% will be set aside for trading participants and local small investors.

The remaining 1% will be offered to Pilipinas Shell’s regular employees.

The company operates 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’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.

A unit of Royal Dutch Shell Plc, the oil refiner will be the third company to conduct an IPO this year. 

The first two were Golden Haven Memorial Park Incorporated and Cemex Holdings Philippines Incorporated. – Rappler.com

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