Petron raises P10 billion from share offer

MANILA, Philippines - Oil giant Petron Corp. successfully raised P10 billion from its recently concluded preferred share offering, a top company official said yesterday.

Petron senior vice-president and chief finance officer Emmanuel E. Erana said strong demand for the shares prompted the underwriters to exercise the oversubscription option of an additional 50 million preferred shares, bringing to 100 million the total number of shares sold to the public.

“Due to a high market demand for the shares, the underwriters have received firm commitments to purchase the shares and an additional 50 million preferred shares which constitute the entire oversubscription option,” Erana said.

BDO Capital & Investment Corp., BPI Capital Corp. and ING Bank N.V. (Manila branch) were the  joint lead managers and bookrunners for the issue.

Ed Franciso, president of BDO Capital, said the issue was two times oversubscribed.

The preferred shares are non-voting and non-convertible with a par value of P1 and are redeemable at the option of the company.

Proceeds from the preferred share issuance will be mainly used for capital expenditures for the company’s refinery operations and the expansion of its retail network.

Petron said it may also use proceeds to prepay short-term debt or invest in special savings or other short-term money market instruments. As of end-September 2009, the company had consolidated short-term debt of P45.6 billion.

Last May, Petron also issued P10 billion worth of five-year and seven-year fixed-rate corporate notes. The issue, one of the largest corporate note issuances in the history of local debt capital markets, was more than three times oversubscribed.

Petron is the market leader in the domestic oil industry with an overall market share of 36.4 percent as of July 2009.