Shell, Caltex set to launch IPOs

Pilipinas Shell Petroleum Corp. and Caltex Philippines Inc., are ready to sell 10 percent of their shares through an initial public offering (IPO). They are simply waiting for the market to get better.

"We have done the necessary preparations for our IPO. We have named our financial advisor," Shell country chairman Oscar Reyes said in an interview.

Reyes said they are just waiting for the "right timing… to ensure success because we want it to have a good impact on the Philippine capital market and of course, to the investors."

Energy Secretary Jose Isidro Camacho has been urging Caltex and Shell to hold their respective IPOs "as soon as possible." Camacho said these two companies should set specific criteria to determine the right timing for their planned IPOs.

Caltex country chairman Nick Florio, said they have identified their financial advisor for the public offering although he declined to name it.

Just like Shell, Florio said they are simply waiting for the proper time. "We have to have a conducive environment before we can hold the IPO to protect the best interest of the public," Florio said.

Under the Oil Deregulation Law (RA 8479), Shell and Caltex were given three years or until February 2001 to undertake their IPOs. But they were allowed to postpone their IPOs.

The DOJ said the necessary implementing rules and regulations (IRR) must be in place before any such IPO is undertaken. The IRR, it said, should provide for the mechanism of effecting the IPO requirement to ensure that the purpose and policy of RA 8479 is achieved.

The DOJ pointed out that based on prevailing economic conditions, it is expected that an IPO at this time may well fall short of the norms of a successful offering both in terms of pricing and distribution if undertaken within the period.

Camacho said they will try to come up with the IRR in the next two weeks.