Pilipinas Shell Petroleum Corp. may undertake a planned P29.7-billion initial public offering ahead of the November schedule as current market valuations remain decent, according to a domestic underwriter handling the transaction.
“Early November is generally the schedule that we were targeting [for the Pilipinas Shell IPO] but due to where we see the market moving, there is a possibility that we may make some adjustments,” BPI Capital Corp managing director Eric Roberto Luchangco said in a recent interview.
“I think if ever we decide to do it, we will try to make it a little earlier. But it has not been decided yet,” Luchangco added.
Luchangco said while the local stock market had been on a decline over recent weeks, market valuations remained decent.
A preliminary prospects filed by Pilipinas Shell, a unit of Royal Dutch Shell Plc., with the Securities and Exchange Commission showed the oil company would sell up to 300 million primary and common shares and with over allotment option of up to 30 million shares at an offer price of up to P90 per share in November.
The company said of the 300 million firm offer shares, 270 million would be secondary shares to be sold by shareholders Shell Overseas Investments B.V., The Insular Life Assurance Co. Ltd. and Spathodea Campanulata Inc. Only 30 million would be primary shares.
The offer shares would represent 18.6 percent of the company’s outstanding capital stock.
Pilipinas Shell hired J.P. Morgan as the global and international book runner, while BPI Capital Corp. is the domestic lead underwriter and domestic book runner.
Under the initial plan, offer period for the IPO was tentatively set on Oct. 26 to Nov. 3, while listing date would be on Nov. 10.
Pilipinas Shell’s planned share sale is in compliance with the Oil Deregulation Law of 1998, requiring oil refiners to list at least 10 percent of their shares in the local stock market.
The oil firm’s IPO was delayed for more than a decade because of what the company called unfavorable market conditions, low oil prices and regulatory issues.
Pilipinas Shell had the second largest overall market share in terms of volume of fuel sold of the domestic retail fuel market at 29 percent based on industry data. As of end-June 2016, it had 996 retail service stations across the country.
Pilipinas Shell owns 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 will be the third company to conduct an IPO this year. The first two were Golden Haven Memorial Parks Inc. and Cemex Holdings Philippines Inc.