Petron plans senior notes offer abroad

MANILA, Philippines — Petron Corp. plans to issue dollar denominated senior perpetual capital securities within the year.

In a disclosure to the Philippine Stock Exchange yesterday, Petron said the terms and conditions of the capital raising activity such as the issue size, price and date, would be determined by the company’s management.

The securities will be listed on the Singapore Exchange Securities Trading Ltd. (SGX-ST).

Petron, however, said net proceeds from the issuance would be used for the repayment of indebtedness and for general corporate purposes.

It has tapped Hongkong and Shanghai Banking Corp. Ltd. (HSBC) as sole global coordinator. Meanwhile, the joint lead managers and joint bookrunners are DBS Bank Ltd., HSBC, MUFG Securities Asia Ltd., SMBC Nikko Capital Markets Ltd., Standard Chartered Bank and UBS AG Singapore branch.

BDO Capital & Investment Corp., China Bank Capital Corp., and PNB Capital and Investment Corp. are the domestic lead managers.

Last December, the Authority of the Freeport Area of Bataan (AFAB) agreed to make Petron’s Bataan refinery one of the registered enterprises of the freeport zone.

As part of its AFAB registration, Petron committed a P3-billion investment to improve its refinery in the next five years.

The oil firm is also completing several requirements from the AFAB to restart its Bataan refinery by the second half of the year.

In a filing with the Department of Environment and Natural Resources-Environment Management Bureau (DENR-EMB), Petron is proposing to implement upgrades through the Petron Refinery Special Projects with an estimated cost of P11 billion.

Petron said this would aid the Bataan refinery to shift to cleaner technology in production of its steam and power requirements by replacing some of its old fuel oil-fired boilers as well as alleviate the refinery’s product pier utilization and traffic through the construction of new transfer facilities.

Petron’s 180,000 barrels per day refinery—the only remaining refining facility in the country—produces high-value petroleum products and petrochemicals capable of supplying 40 percent of domestic demand.

It was shut down in May last year to give way to maintenance activities on major process units and to mitigate the impact of low fuel demand and poor refining margins. It resumed operations in October.

Petron again placed its Bataan refinery on economic plant shutdown in February “considering that the refining business remains challenging both here and around the world.”