Phoenix Petroleum re-issues P1.21 B commercial papers

MANILA, Philippines - Oil player Phoenix Petroleum Philippines Inc. is reissuing P1.21 billion worth of short-term commercial paper (STCP) to bankroll daily operations and refinance existing debt.

The company disclosed yesterday a total of P1.21 billion will be reissued on June 16, 2017 with maturity period of 180 days, or until Dec. 13, 2017, bearing an interest rate of 3.25 percent.

The company previously issued P1.21 billion of short term commercial paper, which matured on July 12, 2016.

STCPs are debt papers issued by corporations with a maturity of less than a year usually used to finance short-term liabilities.

“This is part of our current license with the SEC (Securities and Exchange Commission) to issue the same. It will fund day-to-day working capital and augment existing short term bank lines,” company vice president for external affairs Raymond Zorilla said in a text message.

In 2015, Phoenix Petroleum secured approval from the SEC for the issuance of P3.5 billion worth of STCP. This was issued in three tranches in January 2016 with tenors of 90 days, 180 days and 343 days.

Tranche D has a tenor of 90 days maturing in April 13, tranche E with a tenor of 180 days to July 12 and tranche F with a tenor of 343 days to Dec 22.

In the next three years, the company has allocated a budget of up to P10 billion to finance its expansion.

Of the total, P2 billion will be used for expansion in 2017 and about P6-8 billion will be allocated for possible acquisitions of oil company of any size and or related business such as lubes and liquefied petroleum gas (LPG).

Last month, the oil firm said it is venturing in the LPG retailing business with the acquisition of Petronas Energy Philippines Inc. (PEPI), the local unit of Malaysian oil and gas company Petronas Dagangan Bhd. (PDB), which has been in the country for 20 years.

It also acquired the LPG firm’s affiliate Duta Inc., which manages and holds the various land parcels used in relation to business of PEPI.

Meanwhile, the oil firm has provided P25-million worth of fuels lubricants and technical services for M/V Amazing Grace, the country’s first and biggest humanitarian vessel.