Frontier Oil IPO to raise P2.2B
MANILA, Philippines - The P2.2 billion initial public offering of Frontier Oil Corporation has been approved by the Philippine Stock Exchange, making the oil and gas firm the 5th company to hold an IPO in this year when fund raising has been sluggish.
In an offer circular published by the PSE on Friday, October 25, Frontier Oil will sell 883.626 million primary common shares at P2.50 per share. This means the oil firm will have a market capitalization of P6.7 billion and public float of 32.95%.
Offer period would be from Nov. 25, 2013 to Nov. 29, 2013 while listing date has been set on Dec. 9, 2103. Joint lead underwriters are Philippine Commercial Capital Inc. and Unicapital Inc.
Proceeds from the maiden share sale would be used to finance the drilling of two service contracts (SC) it won from the government.
Frontier has allocated P1.55 billion from the IPO proceeds for the development of SC 50, located off Palawan, and P276.876 million for SC 52, an onshore block in Cagayan Basin.
Earlier, the company said it is targeting the drilling operations in SC 52 to start in November and in SC 50 by March 2014.
The oil and gas firm holds 100% interest in SC 50 and 90% in SC 52 with Trans-Asia Oil and Energy Development Corp., having an option to own the other 10% stake.
Frontier Oil also has a 15% working interest in SC 69, an offshore block in the Visayan Basin that is currently being operated by Otto Energy Ltd.
The company also has an option to acquire Trans-Asia's 5% stake in SC 55, located near the Malampaya gas field.
The remaining P182.873 million will be spent for working capital.
Other companies that are raising funds via IPO this quarter were Travellers International Hotel Group Inc., Harbor Star Shipping Services Inc, Robinsons Retail Holdings Inc. and Concepcion Industries Inc. - Rappler.com