Pilipinas Shell secures P6 billion loan

MANILA, Philippines — Pilipinas Shell Petroleum Corp. (PSPC) has secured a P6-billion loan with the Ayala-led Bank of Philippine Islands (BPI).

The company closed the loan, which has a five-year term, following a competitive tender process and pursuant to the endorsement from the Related Party Transaction Committee and board approval.

PSPC said this replaces an existing short term P6-billion loan.

“The loan will reduce SHLPH’s exposure to short-term volatilities in the market and maximize the low interest rate for its cash requirements,” it said.

Moreover, the company said it would not impact its gearing, “which remains healthy.”

A low gearing ratio means the company has only a small amount of debt in proportion to its assets.

As of end-September, PSPC said its borrowing levels remain controlled, while working capital requirements increased as global market prices for gasoline and diesel increased by 50 percent from December 2020.

In 2018, PSPC entered into a five-year loan agreement with BPI for P9 billion to avail of lower interest rates and refinance existing loans.

From January to September, PSPC posted a net income of P3.4 billion, a turnaround from the P13.9-billion net loss in the same period last year.

The significant recovery was reported despite the mobility slowdown resulting from the two-week Enhanced Community Quarantine (ECQ) implemented in Metro Manila and select provinces last August, and the succeeding Alert Level 4 restriction.

For its network expansion, PSPC had already spent 68 percent of its P2.2-billion capital expenditure program to put up new stations while the rest was used for supply chain maintenance and upgrades, in preparation for demand resurgence.