MANILA, Philippines - The Securities and Exchange Commission (SEC) has given Pilipinas Shell Petroleum Corp. the green light to increase its authorized capital to P2.5 billion from P1 billion, ahead of the company’s planned initial public offering next year.
The new capitalization consists of 2.5 billion shares with a par value of P1 each share.
Of the P1.5 billion increase in capital, 900 million shares were offered for subscription exclusively to all existing stockholders of the corporation at a price of P20 each.
Shell has been trying to beef up its capital in preparation for its planned IPO slated in the first quarter or third quarter of next year.
The company is besieged by a string of cases. Just recently, the Court of Tax Appeals has asked Pilipinas Shell to pay the government more than P3 billion worth of unpaid excise taxes and value-added tax.
The unpaid taxes were allegedly for the importation of raw materials used to produce unleaded gasoline from 2006 to 2009 that is supposedly compliant with the Clean Air Act.
Nevertheless, Shell has been seeing an improvement in its operations, posting a net income of P3.6 billion in the first half of the year.
This was a reversal of the P500 million net loss incurred in the same period last year.
Operating expenses declined to P4.2 billion in the second quarter from P4.6 billion a year ago primarily due to the decrease in overhead charges.
The Oil Deregulation Act of 1998 mandates oil companies including Shell to list at least 10 percent of their common stock within a period of three years since the effectivity of the law.