Petron to spend P50 million on logistics project

MANILA, Philippines - Petron Corp., the country’s largest oil refiner, will allocate more than P50 million fund to  three logistics projects. In its disclosure to the Philippine Stock Exchange (PSE), Petron said its board, has approved the funding for these projects primarily aimed at expanding

its storage facilities.  Petro president Eric Recto said the financing for the projects would come from internally-generated funds.

In addition, Petron said its board has allowed the company to reclassify unissued common shares into preferred shares. Recto said this will be in preparation for the planned issuance of preferred shares which is still being studied by the company.

In the same disclosure, the oil refiner said the board also gave the authority for the company to “transact with trust departments of banks on investments and borrowings”.

The company would defer its planned bond offering after it had successfully raised P10 billion from a corporate notes issuance in May.

“The corporate notes covered our requirement for the year so we will defer the bond  issuance for the meantime,” Recto earlier said. The Petron official said they will possibly

undertake the bond float sometime next year.

“At the moment, we have raised what we need from the corporate bonds, but there is a possibility that we may push through with the bond issuance by next year,” he said.

Petron earlier decided to increase the size of its corporate notes to P10 billion from P3 billion. The oil firm was supposed to issue a combination of corporate notes and bonds to

cover for its financing requirement for its capital expenditures. The issue, one of the largest corporate note issuances in the history of the local debt markets, was more than three times oversubscribed and was priced at 8.139 percent for the five-year tenor and

9.329 percent for the seven-year tenor.

“Funds from the FXCN will be used to pursue projects such as an aggressive retail network expansion program and additional improvements at its 180,000 barrel-perday

Bataan refinery,” Petron said.

Petron said its expansion program aims to further enhance customer convenience

and ensure the company’s market dominance. The program will include the construction of 200 pre-fabricated stations this year. – Donnabelle L. Gatdula