Petron pushes listing of subsidiary

Oil giant Petron Corp. plans to speed up the listing of its subsidiary Petron Marketing Corp. (PMC) in the stock market, a ranking company official said.

However, Petron chairman Nicasio Alcantara said they would first find a partner in the operations of PMC, its investment arm for its COCO (company-owned and company-controlled)-related business activities.

"Ideally, we should have partners because of the huge investment that we have to pour into the COCO projects," Alcantara said.

Alcantara said listing of the shares of PMC in the local stock exchange would help the company raise the much-needed equity they need to finance the long-term capital expenditure of the subsidiary.

The Petron executive also pointed out that they should be able to establish a track record before they could undertake an initial public offering (IPO).

Under Philippine Stock Exchange rules, a company should present a good financial track record for at least three years before it is allowed to list in the local stock market.

Alcantara added that while the planned IPO is included in the long-term (10-year) program of the company, they may consider listing within the next five years.

"We are actually planning to fasttrack the listing but I guess this will not happen within the next five years. We have to build our base first," he said.

For 2004 alone, Petron intends to put up seven COCO service stations as part of its P1.8-billion capital expenditure budget this year.

The Board of Investments (BOI) has approved last year Petron’s application for pre-qualification to establish a retail enterprise under the Retail Trade Liberalization Act (RTLA) of 2000. Until recently, Petron, being partly foreign-owned, was not allowed by the Retail Trade Law to engage in direct retailing.

The direct operation of COCO stations will have a positive impact in its bottom line.

"The establishment of Petron COCO service stations will allow us to capture other revenue streams which include food and other consumer products and the direct franchising of complementary quick service restaurants," Petron public affairs manager Virginia Ruivivar said. "This is in line with our thrust to capture more of the retail market."

Over a five-year period, the company will put up nearly 30 COCO service stations in strategic areas. The project cost of one service station could range from a low of P3 million to P120 million.

Recently, the country’s largest oil refiner set up a separate subsidiary called Petron Treats Subic Inc. to operate its "mega-station" at the Subic Bay Metropolitan Area (SBMA).

The 3,200 square meter service station will be offering a complete range of fuel products and wash and service bays. Apart from a Treats convenience store, it will also house popular food establishments.