Pilipinas Shell to launch IPO after May elections

CEBU, Philippines - Pilipinas Shell Petroleum Corp. hopes that market conditions will be good after the national elections in May for it to push through its long-awaited initial public offering (IPO).

In an interview with The FREEMAN late Wednesday, Shell Country Chairman Edgar O. Chua said the company is in talks with the Department of Energy on its IPO plan.

"We're looking at after elections but hopefully the market will also be much better after that," Chua said. "We're preparing for that (IPO)."

When asked whether the oil refiner and retailer will still proceed its listing on the stock exchange should the market remain down by that time, Chua said it's something they need to review, noting that they are making sure prospective investors will have good returns.

But the oil company's maiden share sale is targeted anytime this year, he said.

Shell's listing plan is to comply with a law that requires oil refiners in the country to sell a portion of their shares after the industry was deregulated.

Chua said the law requires the company to sell at least 10 percent of its common stock through a public offering.

Republic Act No. 8479 or the Downstream Oil Industry Deregulation Act of 1998 encourages private oil players to have a broader ownership base.

Chua said the oil company may go beyond selling 10 percent of its shares but it will largely depend on investors' interest and its expansion projects.

The executive said the proceeds from the planned IPO are eyed to be spent for expansion of its retail sites and its refinery and manufacturing operations.

"[The proceeds] will be used to continue to grow the business," he said.

Chua said the company has yet to know how much it will raise from the IPO.

Pilipinas Shell, the local unit of Royal Dutch Shell Plc, is into oil and gas exploration, extraction and refining and selling of petroleum products.

Petron Corp., another oil refiner controlled by San Miguel Corp., listed  on the stock market in 2004.

Earlier, the Philippine Stock Exchange projected 8-10 companies to join the market this year through IPOs and listing by way of introduction and backdoor listings. (FREEMAN)