Pilipinas Shell’s final offer price: P67 per share

MANILA, Philippines – Pilipinas Shell Petroleum Corporation has set its final offer price at P67 per share, becoming the country’s second biggest initial public offering (IPO) this year.

“Pilipinas Shell prices at P67 per share the top end of the price guidance of P65-P67 price guidance,” BPI Capital chief operating officer Reginaldo Anthony Cariaso said.

With a base offer of 275 million shares and another 16 million shares to cover overallotment, Pilipinas Shell will raise as much as P19.5 billion in proceeds from its IPO.

The offer shares consist of 247.5 million secondary shares to be sold by selling shareholders and 27.5 million primary shares.

Pilipinas Shell said it will not get proceeds from the sale of secondary shares. (READ: Shell IPO late by 12 years now – DOE)

This means that the oil refiner will only receive P1.84 billion in proceeds from the sale of primary shares, which will be used to expand its retail network across the country.

Based on its initial filing with the Securities and Exchange Commission, Pilipinas Shell planned to raise as much as P29.7 billion in proceeds from sale of as much as 330 million shares at P90 per share.

But after the book building process, the oil company lowered not only its offer price, but the offer shares as well.

Cariaso explained that offer size was reduced because Royal Dutch Shell PLC, which is the parent company of Pilipinas Shell, did not want its ownership in the oil refiner to drop below 55%.

With the new offer size, Cariaso said Royal Dutch will keep in ownership in Pilipinas Shell above the 55%.

The offer period will be from October 19 to October 25, while listing date has been set on November 3.

Pilipinas Shell is one of the two refining and marketing oil companies in the Philippine with an estimated domestic refined products market share of 24%. 

It operates a 110 barrel-per-day refinery in Batangas, which recently underwent an upgrade to deliver Euro 4-compliant fuels.

As of June 30, 2016, the company operates a network of 966 Shell Group-branded retail service stations, comprised of 583 retail service stations in Luzon, 160 in Visayas and 223 in Mindanao, offering fuel-based products, lubricants, non-fuel products and services.

Pilipinas Shell will be the third company to be listed with the Philippine Stock Exchange this year. The first two were Golden Haven Memorial Park Incorporated and Cemex Holdings Philippines Incorporated. – Rappler.com