Oil refiner Pilipinas Shell Petroleum Corp. reduced the indicative offer price for its planned initial public offering to a range of P64 to P70 per share from an initial maximum offer price of P90, according to Thomson Reuters publication IFR.
Philippines Shell is set to raise P21.12 billion to P23.1 billion in proceeds from the IPO, based on the new offer price range.
A source at Pilipinas Shell confirmed the new price range. The final price will be announced on Oct. 13.
Pilipinas Shell earlier obtained approval from Securities and Exchange Commission and Philippine Stock Exchange to conduct its maiden share offering.
Pilipinas Shell will offer 300 million shares to the investing public and another 30 million in case of overallotment.
These shares represent 18.6 of the company’s outstanding capital stock. Of the 300 million primary shares, 270 million shares will be sold by the selling shareholders, namely Shell Overseas Investments B.V., The Insular Life Assurance Co. Ltd. and Spathodea Campanulata Inc. Proceeds from this portion of the offering will go to the selling shareholders.
Proceeds from the remaining 30 million primary shares will be used to finance capital expenditures, working capital and general corporate expenses.
Pilipinas Shell aims to expand its retail network to 1,220 retail service stations by 2020, up from 996 service stations as of end-June 2016.
The company said at least 69 percent of total offer shares would be sold to foreign investors and cornerstone investors and 30 percent would be given to trading participants and local small investors.
The remaining 1 percent will be offered to Pilipinas Shell’s regular employees.
The company operates a 110,000-barrel-per-day refinery in Batangas, which recently underwent an upgrade to deliver Euro 4-compliant fuels. It is one of the only two integrated refining and marketing companies in the Philippines.
Pilipinas Shell’s planned share sale is in compliance with the Oil Deregulation Law of 1998, requiring oil refiners to list 10 percent of their shares in the local stock market.
