Pilipinas Shell Petroleum Corp., the country’s second largest oil company, said Monday it secured a five-year loan amounting to P6 billion from the Bank of the Philippines Islands to refinance P6 billion in short-term loan.
This followed a competitive tender process, and the endorsement from the related party transaction committee and board approval of Pilipinas Shell.
“The loan will reduce SHLPH’s exposure to short-term volatilities in the market and maximize the low interest rate for its cash requirements,” the company said in a disclosure to the stock exchange.
The drawdown date of the loan is set on Dec. 20.
Pilipinas Shell recently remitted “under protest” P3.49 billion to the Bureau of Customs, representing the supposed excise and value added taxes on fuel blending components used in refinery operations from 2014 to 2020.
The country’s second biggest oil company said the BOC recognized Pilipinas Shell’s intent to pay under protest the excise tax and VAT relative to alkylate imports.
Pilipinas Shell made the statement following the demand letter issued by the Port of Batangas in view of the dissolution by the Supreme Court of the temporary restraining order it earlier issued, after the case was remanded to the Court of Tax Appeals.
Pilipinas Shell said it would remit the amount under protest, “taking into consideration the current economic challenges of the country as well as ensuring continued operations, uninterrupted imported fuel supply and welfare of our motoring public and consumers.”
“This will allow us to continue to provide to our customers and to the general public who rely on our products and mindful of the thousands of Filipinos whose livelihood depends on our ability to maintain our operations,” the company said.
Pilipinas Shell said the case on whether alkylate was subject to excise tax remained to be decided by the courts. The company is importing alkylate as a blending component for unleaded gasoline.
Pilipinas Shell said in an earlier disclosure that it would continue to preserve and protect its rights and remedies under the law.
Pilipinas Shell reported a net income of P3.4 billion in the first nine months, a turnaround from a P13.9-billion loss in the same period last year.
Pilipinas Shell borrows P6b from BPI to refinance short-term debt
