Petron completes $550-million securities issue

PETRON Corp. has completed the issuance of $550-million undated unsubordinated capital securities, the Ramon S. Ang-led oil company said on Tuesday, adding that these will be listed in Singapore.

In a disclosure to the local bourse, Petron said that it expects to list the securities on the Singapore Exchange Securities Trading Ltd. by April 20.

The net proceeds from the issuance, placed at around $547.8 million after the deduction of commissions, will be used by the company to repay debts and for general corporate purposes, it said.

The development comes a week after the company released its final offering circular, which said the perpetual capital securities are in denominations of $200,000 and in integral multiples of $1,000 in excess.

The initial rate of distribution is at 5.95% per annum, and the increase in distribution rate is at a yearly 2.50%. The issue price is at 100%.

Petron, the country’s biggest oil firm, said that the securities do not have a fixed redemption rate because they are perpetual. It clarified that these will not be registered under the Securities Act, and may not be offered or sold within the US.

“The Securities may be sold in other jurisdictions (including the United Kingdom, Singapore, Hong Kong, Japan, and the Philippines) only in compliance with applicable laws and regulations,” the company added.

Hongkong and Shanghai Banking Corp. Ltd. acted as the trustee, registrar, principal paying agent, calculation agent and transfer agent for the issuance.

PROJECTED CAPEX

Based on its final offer circular, the oil refining and marketing company also gave details about its 2021 projected consolidated capital expenditure (capex) projects, which stands at P11.05 billion or $230 million.

The amount, which will be raised through a combination of internal cash generation and external financing sources, will mainly fund ongoing capex projects, the firm said. The planned capex is based on its management’s estimates and have not been appraised by an independent organization.

It said the budget might change “as projects are reviewed or contracts entered into and are subject to various factors.”

These factors include market conditions, the general state of the Philippine and Malaysian economies, the company’s operating performance and cash flow, and its ability to obtain financing on terms satisfactory to management, it said. —

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