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Shell taps 2 banks to underwrite IPO

Pilipinas Shell Petroleum Corp., a unit of Royal Dutch Shell Plc., hired two banks as underwriters for its planned initial public offering in the second half of 2016,  according to a Thomson Reuters publication.

Thomson Reuters publication IFR said Shell tapped BPI Capital Corp. and JP Morgan as underwriters, although the size and timing of the offer has not been finalized.

IFR said the banks pitched a valuation of $3 billion to $5 billion for Pilipinas Shell, which would enable the oil refiner and distributor to generate between $300 million and $500 million in proceeds by selling the required minimum public float of 10 percent.

Shell Philippines country chairman Ed Chua last year said the company was preparing for an IPO sometime in 2016.

“But timing should be good [for IPO as] the market should be conducive,” Chua said.

Chua said Shell had not determined what to do with the proceeds from the IPO yet, as the main objective was to comply with the Oil Deregulation Law of 1998.

The law requires oil refiners to list at list 10 percent of their shares in the local bourse.

Shell announced in 2013 a plan for an LNG import facility in Batangas that would be carried out by Shell’s Technology Centre Bangalore, which delivers advanced technical studies, projects and services for Shell around the world.

Chua said aside from market conditions, Shell was still reviewing the company’s financial performance in the wake of the slump in world oil prices.

The oil refiner raised concerns over the decision of the Commission on Audit to impose P53.14 billion in taxes on the contractors of the Malampaya gas-to-power project in northwest Palawan.

Shell was also forced to shut down its oil depot in Pandacan to comply with a Supreme Court ruling directing the oil companies to move out of the Manila residential district.

Other companies are also planning to conduct IPOs in the second half of the year.

Among the IPOs approved by the Securities and Exchange Commission this year are the P40-billion maiden share sale of Cemex Holdings Philippines Inc., the P787-million share sale of Golden Haven Park Inc. and the P1.2-billion IPO of Philippine Primark Properties Inc.

Topics: Pilipinas Shell Petroleum Corp. , initial public offering , IPO , Thomson Reuters
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