Independent oil player Phoenix Petroleum Philippines Corp. said it will use the P7-billion proceeds from its follow-on preferred shares offering to finance its depot and retail network expansion.
“Capex, mostly for depot and retail expansion,” Phoenix senior vice president for external affairs Raymond Zorrilla said in response to queries about the purpose of the share offering.
Phoenix plans to expand its network to 650 retail stations by end of 2019.
Zorrilla said the company could also tap the short-term commercial paper program to supplement its working capital funding.
Phoenix announced a follow-on public offering of up to 7,000,000 Series 4 preferred shares at an offer price of P1,000 apiece.
“In a letter received by the [Philippine Stock Exchange] on Oct. 18, 2019, the company advised the exchange that…the final dividend rate for the offer shares is 7.5673 percent,” the company said.
Phoenix increased the planned issuance of perpetual preferred shares to P7 billion from the previously approved P5 billion.
“Issuance was increased as another financial institution signified intent to come in as a joint underwriter for P2 billion on top of CBC Capital’s P3 billion underwriting commitment,” Zorrilla said.
Phoenix reported a net income to P896.83 million in the first half, down 7 percent decline from P968.8 million in the same period last year.
“Against a backdrop of challenging operating conditions, we continue to invest and build on our long-term competitive advantages. We are building scale to drive efficiency in fuels and LPG. We are investing in the brand and more importantly, in capabilities that will allow ourselves to adapt and innovate in markets,” said Phoenix chief operating officer Henry Albert Fadullon.
Phoenix’s first-half operating income grew 22 percent year-on-year to P2.07 billion fueled by retail growth and new businesses such as liquefied petroleum gas and Phoenix Petroleum Singapore.
Phoenix Singapore, which derived 39 percent of its volume from third-party customers, grew volume by 89 percent.