PETRON Corp. said it plans to issue dollar-denominated securities to refinance the $750 million it raised in 2013.
In a disclosure to the Philippine Stock Exchange on Wednesday, Petron said it “intends to issue new undated capital securities to repurchase, refinance and/or redeem the 2013 securities and is seeking the proposed amendments by way of the consent solicitation to confirm its ability to issue the new securities.”
The country’s largest oil refiner and distributor, said the new securities are “expected to be senior to the 2013 securities until such 2013 securities are repurchased, refinanced and/or redeemed.”
The company said it would seek consent from the holders of the $750 million securities.
“The management of the company has been authorized to pursue the solicitation of consents from the holders of the company’s undated subordinated capital securities issued in 2013 and listed on the stock exchange of Hong Kong Ltd., for the approval of certain amendments to the trust deed dated February 6, 2013, as amended and supplemented from time to time.”
The $750 million was used to finance the upgrade of its refinery in Limay, Bataan. There are plans to expand its existing refinery rather than build a new one.
“Our plan is expand our existing capacity from 180,000 barrels a day to around 300,000 barrels a day,” Petron President Ramon S. Ang said. “If we can secure this property, then we can use that for our expansion. If we can expand in this existing plant, it will be faster and cheaper.”
An expansion of its Limay refinery will involve the development of a 22-hectare property of Philippine National Oil Co. Ang said Petron has submitted its intention to develop PNOC’s Bataan property.
Earlier, Petron was planning to put up a new refinery South of the existing Bataan refinery, possibly in Southern Luzon, the Visayas or Mindanao. The new refinery would have an investment of between $15 billion and $20 billion, and a capacity of 250,000 barrels per day.
Currently, Petron has a combined retail network of almost 2,900 service stations, more than a fifth of which are in Malaysia. Since 2012, it has rebranded and built an extensive retail network of nearly 600 stations in Malaysia. Petron has dozens of service stations in various stages of development in both countries.
At end-June this year, Petron posted a 56-percent increase in its net income from P5.3 billion at end-June last year to P8.2 billion, mainly on account of higher sales volume.
“With our upgraded refining capabilities, we derived more value and produced more profitable products. This is strongly complemented by our extensive expansion efforts in both our logistics and retail businesses,” Ang said.
During the period, total sales volumes for both Malaysia and the Philippines reached 52.9 million barrels, slightly higher than the previous record of 52.6 million from 2016. Petrochemical sales also surged 78 percent year-on-year.
Consolidated sales revenues increased by 28 percent to P207 billion in the first six months of the year, from P161.9 billion over the same period in 2016.
Operating income stood at P14.6 billion, a 27-percent improvement from the previous year’s P11.5 billion.