Petron allots ₧11B to fund ongoing projects this year
Etron Corp. is setting aside about P11 billion in capital expenditure (capex) this year, higher than the P8.5 billion it allocated for 2020.
P“The Company’s estimated consolidated capital expenditures for 2021 are about P11,048 million, primarily to fund ongoing capex projects,” Petron said in its final offering circular.
This year’s capex will be financed by a combination of internal cash generation and external financing sources.
Petron said the amount is just an estimate as projects are constantly being reviewed and the contracts entered into are subject to various factors. These include market conditions, the general state of the Philippine and Malaysian economies, the company’s operating performance and cash flow, and the company’s ability to obtain financing.
over the past several years, Petron has made significant capex to maintain and upgrade the Petron Bataan Refinery, to expand its retail service station network in the Philippines, and to upgrade its service stations in Malaysia.
in 2018, 2019 and 2020, Petron’s capex stood at P10.42 billion, P19.8 billion and P8.5 billion, respectively, which primarily related to expenditures for refinery, depot and service stations. it has funded its capex with net cash flows provided by operating activities and debt or equity financing.
Petron temporarily closed down its 180,000-barrel-per-day refinery in May last year and reopened in october. it again ceased refinery operations last February 10 and will reopen either May or June this year.
it is now seeking to complete the requirements cited by the Authority of the Freeport Area of Bataan to make Petron’s Bataan refinery one of the registered enterprises of the freeport zone. This involves an additional investment of P3 billion in the next 5 years.
it also plans to build a Refinery Solid Fired Boiler (RSFBB-3) Phase
3. The P11-billion “Petron Refinery Special Projects” will consist of two 200 tph Circulating Fluidized Broiler (CFB), two 22megawatt Backpressure Turbine Generators, 500-meter fuel transfer line.
Petron is expected to raise $550 million worth of senior perpetual capital securities within the month to repay debt and fund corporate programs.
The securities would have an initial rate of distribution of 5.95 percent per annum until April 19, 2026, payable semi-annually in arrears on April 19 and october
19. After 2026, the securities will have a step-up rate of 2.5 percent per annum.
The securities will be listed on the Singapore exchange Securities Trading Ltd. and sold in the United Kingdom, Singapore, hong Kong, Japan and the Philippines.