Phoenix Petroleum to issue P3.5-B STCPs

MANILA, Philippines - Independent oil player Phoenix Petroleum Philippines plans to raise P3.5 billion from the issuance of short-term commercial papers.

Phoenix Petroleum obtained an issuer credit rating of PRS Aa minus (corp.) from local credit watcher Philippine Rating Services Corp.

A company rated PRS Aa has a strong capacity to meet its financial commitments relative to that of other Philippine corporates.

PRS Aa is the second highest rating category on PhilRatings’ existing credit rating scale. PhilRatings can also include a plus or a minus sign to further qualify its rating.

An issuer credit rating is a measure of a company’s over-all creditworthiness, relative to obligations maturing within one year.

Proceeds from the issuance would be used to support Phoenix Petroleum’s ongoing network expansion aimed at taking better advantage of growing vehicle sales domestically.

Phoenix Petroleum is the  biggest independent oil player in the Philippines. Since the opening of its first retail station in 2005, the company’s total number of branches grew to 54 in 2007, 161 in 2010 and further to 443 as end of June this year.

Its aggressive network expansion allowed the company to enjoy a 4.1 percent share of the total market as of end-2014.

Phoenix Petroleum’s businesses include trading, terminaling and hauling.  It likewise distributes lubricants and chemicals.

While revenues have declined due to the downward movement in oil prices, Phoenix Petroleum’s net profit margins have improved given the company’s greater focus on its retail sales.

From a net profit margin of 1.53 percent in 2013, it improved to 1.77 percent in 2014, and further to 2.95 percent for the six-month period ended June 2015.

PhilRatings said Phoenix has a significant amount of undrawn credit lines from various local and multinational financial institutions in the country which adds to its financial flexibility. This, together with the company’s improving level of cash flows from operations, puts Phoenix in a better position to support its operations and to compete effectively.