Petron sets tender offer for $50 million perpetual bonds

MANILA, Philippines — Petron Corp. is repurchasing as much as $50 million worth of perpetual bonds listed in Singapore.

Petron, in a stock exchange filing, said it has made an announcement in the Singapore Exchange Securities Trading Ltd. on its proposed tender offer to purchase up to $50 million of its outstanding $500 million, 4.60 percent senior perpetual capital securities issued on Jan.19, 2018.

The company said the tender offer is being undertaken “to optimize the cost of capital and capital structure of the offeror.”

“The tender offer also provides liquidity to investors at a premium to market price,” Petron said.

It said the price of the tender offer would be determined pursuant to a Modified Dutch Auction Procedure.

“Under the Modified Dutch Auction Procedure, the offeror will determine, in its sole discretion, following expiration of the tender offer, the purchase price for the securities, taking into account the principal amount of securities so tendered and the offer prices specified (or deemed to be specified) by tendering securityholders,” the company said.

Based on the indicative timetable for the tender offer, the expiration deadline is set on Jan. 12   while payment date is expected by around Jan. 18.

Petron is the Philippines’ largest oil company with a combined refining capacity of 268,000 barrels-per-day and produces a full range of world-class fuels and petrochemicals.

It operates the only remaining refinery that is capable of providing nearly 40 percent of the country’s petroleum requirements, as well as 30 terminals, and over 2,000 service stations nationwide.

Petron is also looking to construct and operate a coco-methyl ester plant following the recent amendment of its articles of incorporation to include biofuels in its primary purpose.

Last year, the company said it is programming to spend between P10 billion and P15 billion in capital expenditures annually over the next three years.

It is also looking at improving its logistical capability and expanding its storage facilities to make it more cost efficient, allocating around P2 billion to P3 billion annually for such projects.

Petron posted a consolidated net income of P8.2 billion in the first three quarters of 2022, 64 percent higher that the P4.99 billion recorded in the same period a year earlier.