Phoenix Petroleum to raise P2.5 B via notes

MANILA, Philippines - Davao-based oil firm Phoenix Petroleum Philippines Inc. said it will raise as much as P2.5 billion through the issuance of corporate notes this month.

“The company’s board of directors has approved the issuance of a five-year fixed rate notes facility up to P2.5 billion,” the company told the local stock exchange.

Phoenix Petroleum hired Penta Capital Investments Corp. and China Banking Corp. as joint arrangers for the corporate notes.

China Bank was tapped as the facility and paying agent for the fundraising.

“It will be used for capital expenditures and refinancing of existing debts,” Raymond Zorilla, assistant vice-president for external affairs of Phoenix Petroleum, said in a mobile phone message.

Zorilla said the corporate notes will be issued within the month.

In September, Phoenix Petroleum secured shareholder approval to sell P500 million worth of corporate notes, with P180 million warrants to be issued to BDO Unibank Inc.

A warrant gives investors the right to buy shares from the issuer at a specific price within a specific timeframe.

Phoenix Petroleum plans to double its service stations to at least 500 in the next five years through a nationwide expansion program.

The new retail stations will allow the company to maintain its position as the top independent oil firm in the country.

In July, Phoenix Petroleum and BDO signed the deal for the convertible debt with warrants, with BDO Capital as the sole arranger.

From 120 stations in 2009, Phoenix Petroleum’s branch network increased to 161 and 220 stations in 2010 and 2011, respectively. It ended the first quarter with 240 retail stations.

Phoenix Petroleum is into the trading of refined petroleum products and lubricants, operation of oil depots and storage facilities, and allied services.