Petron tender offer for HK-listed securities reach max amount

MANILA, Philippines — Petron Corp.’s tender offer generated strong interest from holders of the $750-million securities listed at the Hong Kong stock exchange.

In a disclosure to the Philippine Stock Exchange yesterday, the oil firm said the aggregate amount of the securities validly tendered pursuant to the tender offer reached $401.957 million, which was determined to be the final maximum acceptance amount in its tender offer.

“The company has decided to accept for purchase an aggregate principal amount of $401,957,000 of securities validly tendered with no pro rata scaling,” Petron said.

Earlier this month, Petron launched a tender offer of its outstanding $750-million, 7.5 percent undated, subordinated capital securities listed on The Stock Exchange of Hong Kong Ltd.

It made a tender offer on securities up to $350 million until Jan. 16.

Petron has set the settlement date on or about Jan. 22, subject to the satisfaction of the financing condition. The securities purchased by the company will be cancelled.

Meanwhile, the balance amounting to $348.043 million will remain outstanding.

To finance the tender offer, Petron announced it is raising $500 million from the issuance of senior perpetual capital securities today.

The distribution rate is 4.6 percent per annum until July 19, 2023, payable semi-annually in arrears on Jan. 19 and July 19.

Beyond 2023, the securities will have a step-up rate of 2.5 percent per annum.

For the tender offer process, Petron has retained The Hongkong and Shanghai Banking Corp. Ltd., Singapore branch as the sole global coordinator.

It tapped Australia and New Zealand Banking Group Ltd., DBS Bank Ltd., Deutsche Bank AG, Singapore Branch, Standard Chartered Bank and UBS AG Singapore Branch, as the joint dealer managers. The company has also engaged D.F. King Ltd. as the information and tender agent for the tender offer.

In 2013, Petron raised $500 million and another $250 million from the issuance of perpetual bonds which was used to finance its Refinery Master Plan 2 (RMP-2), which hiked the Bataan refinery’s production from 120,000 barrels per day to 180,000 barrels per day.

This also allowed the oil company to start local production of Euro-IV compliant fuel products, offering a full-range of premium fuels to the market compliant with global standards ahead of the 2016 government mandatory deadline.