Pilipinas Shell Petroleum Corp. has reduced the size of its initial public offering to 291 million shares from the initial 330 million shares after lowering the indicative price of the stock, the underwriter handling the oil refiner’s IPO said Friday.
BPI Capital Corp. chief operating officer Reginaldo Anthony Cariaso said in an interview the size of the IPO was comprised of the base offer of 275 million shares and 16 million shares to cover over-allotment.
Pilipinas Shell is expected to generate between P18.6 billion and P20.3 billion in proceeds from the share sale based on the new price range of P64 to P70 apiece.
Cariaso said the company opted for a lower size offering after parent Royal Dutch Shell Plc. wanted an ownership of at least 55 percent.
Cariaso said Pilipinas Shell’s IPO had received good response from domestic and international investors. The company has no plans to get cornerstone investors for the IPO.
Cariaso said BPI Capital would go Hong Kong, Singapore and United Kingdom for the Pilipinas Shell’s international roadshow.
He said the new price range of P64 to P70 per share, or lower than the initial P90 maximum offering price, was the level where investors would be willing to participate in the public offering.
At least 69 percent of the offered shares will be sold to foreign investors and 30 percent to trading participants and local small investors. The remaining 1 percent will be offered to Pilipinas Shell’s regular employees.
The oil 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.
BPI Capital is the domestic underwriter for the Pilipinas Shell’s maiden share offering, while JP Morgan is the global and international book runner.