Local oil giant Petron Corp. has successfully raised a total of P14 billion from its preferred share offering last month, surpassing the base offer by P1.5 billion.
Petron announced that it has listed the preferred shares at the Philippine Stock Exchange on Friday, July 7. The funds raised will be used to redeem senior perpetual capital securities issued in 2018.
Perpetual capital securities have no maturity date but can be redeemed by the issuer after a certain period of time.
“We are grateful and humbled by the strong response from the investment community. This positive result encourages us to pursue projects that will ensure our long-term growth and sustainability,” said Petron President and CEO Ramon Ang.
The company’s initial base offer of P12.5 billion was oversubscribed, affirming the continued support of institutional and retail investors for Petron.
The dividend rates per annum on the preferred shares are 6.7079 percent for Series 4A, 6.7972 percent for Series 4B, and 7.0861 percent for Series 4C.
Dip in Earnings
The preferred shares are part of a shelf registration of P50 billion worth of preferred shares previously filed with the Securities and Exchange Commission. Preferred shares prioritize interest and dividend payments for holders but do not grant voting rights.
Petron Aims to Raise P50B from Bond Market Foray
Petron is banking on the consistent rise in fuel demand and improved industry conditions to drive growth this year.
Despite strong sales volume and fuel demand, the company experienced a slight dip in earnings in the first quarter of 2023. Net income declined to P3.4 billion from P3.6 billion in the same period last year.
Petron’s Earnings Affected by Higher Financing Costs
This decrease is attributed to higher financing costs, although this was partially offset by an 11-percent increase in consolidated sales volume from 25.7 million barrels to 28.6 million barrels.