Frontier Oil defers IPO

MANILA, Philippines - Uncertainties in the investment climate has prompted upstream oil exploration firm Frontier Oil Corp. to postpone its P2-billion initial public offering (IPO).

Frontier Oil’s debut in the Philippine Stock Exchange (PSE) will be pushed back to early next year due to various investor concerns here and abroad, the company said.

“In consultation with the company’s underwriters and several significant investors, Frontier Oil believes it is in the best interests of both the company and its shareholders to defer its listing until early next year,” Frontier Oil president and CEO Kristoffer Fellowes said in a letter to the PSE.

“Additionally, the company is concerned that the tragic and dramatic events surrounding (Super) Typhoon Haiyan have understandably create an uncertain investment environment in the Philippines over the past few weeks,” he added.

Frontier Oil said recent events resulted in the deferment of several scheduled meetings and activities.

In mid-November, the firm pushed back its IPO timeline to give more time for investors to understand the business. The company extended its bookbuilding period to Nov. 22 from Nov. 15, with the price setting date moved to Nov. 25 from Nov. 18.

“The company expects the revised timetable to overcome any negative impact upon both the Frontier Oil IPO and emerging markets more generally from the tapering off of the quantitative easing measures in the US,” Fellowes said.

Since hitting its 31st all-time high this year at 7,392.20 on May 15, the bellwether Philippine Stock Exchange index has dropped to 6,025.37 as of yesterday given concerns on liquidity and the economic impact of the supertyphoon.

The upstream oil exploration firm was set to become the ninth local firm to list in the local bourse this year.

Frontier Oil planned to sell 883.62 million common shares at an offer price of up to P2.50 apiece, or a total IPO value of P2.209 billion. It also applied for the shelf registration of 17.95 million shares that can be sold for as much as P2.50 per share or a total of P44.87 million.

The IPO proceeds will be used for general working capital and for the development of Service Contracts (SC) 50 and 52, which will provide the platform for the company’s continuing growth.