Lock-up period for Shell stockholders set to expire

The voluntary lock-up period for the institutional investors in publicly listed Pilipinas Shell Petroleum Corporation (SHLPH) will already fall due May 2 this year.

The shareholders that signed up into the lock-up deal have been Shell Overseas Investments B.V., Insular Life Assurance Company Ltd. and Spathodea Campanulata Inc. which lodged their common shares with Rizal Commercial Banking Corporation pursuant to the escrow arrangement.

These shareholders, it was noted, “physically delivered the subject common shares to the escrow agent for deposit and safekeeping during the lock-up period.”

It was emphasized that Spathodea, although it does not own at least 10-percent of the offering, has “agreed to voluntarily lock-up all its shares.” With the lock-up expiration, this will at least free up in the market its 67,184,265 common shares.

Under Section 3 of the Escrow Agreement sealed with the shareholders, it was stipulated that the lock-up period shall be for 180 days following the listing of the company’s common shares at the local bourse.

As the actual market debut of the company had been on November 3 last year, that lock-up timeframe then is expected to expire May 2 this year.

Shell noted that “the necessary approval shall be obtained from the PSE to release the corresponding stock certificates to SHLPH’s Corporate Secretary or his duly authorized representative after the end of the lock-up period.”

Shell had one of the highly profitable stock offering last year – and part of the proceeds from the listing prop its investment expansion plans.

Beyond beefing up its retail network, Shell is currently targeting completion of its $15 million bitumen facility by yearend – or at the latest – first quarter of next year.

“Our bitumen marketing department is now on high gear, “Pilipinas Shell President Cesar G. Romero said in an interview, with him noting that the company is keeping a keen eye on reinforcing its market share on this segment.

Bitumen is a residue of petroleum distillation – and is often utilized for road surfacing or roofing thus it could be a good investment bet to underpin the government’s infrastructure development program.

“We already have 50-percent of the bitumen market share,” Romero disclosed, but with their new bitumen facility, the company now has higher probability of cornering heftier pie in the market.

He expounded “we already have high market share in bitumen in the Philippines, and we would want to continue further supporting that. For our bitumen, it used to be all imports.”

Romero thus noted that with their own bitumen facility, “we will import some components, and we will use some components of our refinery, then we’ll blend these components so we’ll have higher value-added product.”

On top of this investment, the oil firm also cast on blueprint planned technology installation to extend their Tabangao refinery’s run-length.

Romero explained that the usual turnaround cycle of their refining facility is four years, but with the plan, it could be extended to six years.

“We’re looking at what’s the most appropriate technology to be used to increase run-length because at the moment, our normal turnaround cycle is every four (4) years. But there are technologies that you can employ to make it run for six (6 ) years,” he explained.

The company previously invested $230 million for the upgrade of its Tabangao refinery and for it to be able to produce the Euro IV quality of products that had been mandated for sale in the Philippine market in 2015.