"We are requesting for a flexibility period of two to three years," Shell country chairman Oscar Reyes, said, over the weekend. He said they have advised the government that given the current state of market right now, an IPO would not be favorable both to the government and the company.
"If we will proceed with the IPO, it might have an adverse impact on both the capital market and our company," he said, adding that they have been asking for the deferment of the IPO since the early part of last year due to the anemic performance of the local stock market.
Reyes said they are seeking the support of the Department of Energy to support their request for a postponement of the IPO.
Energy Secretary Mario V. Tiaoqui said they are working closely with the oil companies to assess the situation. "I don’t think there would be an IPO of Shell Caltex, especially in light of what’s happening," Tiaoqui said.
Caltex is also thinking of deferring plans to go public due to the sluggish stock market. "We are still waiting for the right timing. But we are expecting it to be deferred. For how long, we do not know," Nicholas Florio, Caltex country chairman, said.
Section 22 of the Oil Deregulation Act of 1998 requires local oil refiners to let the public own at least 10 percent of the company through an IPO on or before Feb. 28 this year.
Earlier, Caltex and Shell had asked the Department of Finance (DOF) and the Securities and Exchange Commission (SEC) to allow them to defer their IPOs.
Shell and Caltex argued that the IPO requirement should be deferred until such time as more favorable economic and business circumstances exist.
Caltex is jointly owned by US oil giants Texaco Inc. and Chevron USA Inc. It refines and distributes about 72,000 barrels of oil a day. Pilipinas Shell Petroleum Corp. is a subsidiary of the Royal Dutch/Shell Group of Companies. Industry leader Petron Corp. is already listed in the stock market. – Donnabelle Gatdula