Petron sets tender offer for up to $350M notes
PETRON Corp., the largest oil refining and marketing company in the Philippines, said it would repurchase up to $350 million of its $750 million outstanding undated securities listed on the Stock Exchange of Hong Kong (HKEx).
In a disclosure to the Philippine Stock Exchange (PSE), Petron said on Monday its Executive Committee had approved the conduct of a tender offer to holders of its outstanding $750-million, 7.5-percent capital securities listed on the HKEx.
“The tender offer is being made in connection with a concurrent offering of senior perpetual capital securities by the company,” Petron said.
After the repurchase, Petron would lodge an application with the Singapore Exchange Securities Trading Ltd (SGX-ST) for the listing and quotation of the securities on the SGX-ST.
In its tender offer announcement, Petron said it proposed to accept for purchase securities up to $350 million.
The price payable per $1,000 in principal amount of the securities will be $1,030 plus any accrued but unpaid distributions and any arrears of distributions, it said.
“The Tender Consideration for the Securities validly tendered, not withdrawn and accepted for purchase will be paid on or about one business day following the settlement of the New Offering,” Petron said.
To participate in the Tender Offer and be eligible to receive the Tender Consideration, security holders must validly tender their Securities by delivering a valid tender instruction that is received by the Information and Tender Agent by 5:00 p.m. on January 16, 2018. “No tenders will be valid if received by the Information and Tender Agent after the Expiration Deadline,” Petron said.
Petron said the exercise is part of its active management of its capital structure and is intended to be funded by the issuance of the new securities.
“Any Securities eventually acquired by the Company or pursuant to the Tender Offer will be cancelled and will not be re-issued or re-sold,” it said.
“The move is seen to boost their equity portfolio,” Eagle Equities, Inc. research head Chris Mangun told The Manila Times in a phone interview.
“They may be getting a lower rate in Singapore than Hong Kong,” Mangun added, explaining why Petron would be paying a lower interest rate to Singaporean investors than to HK investors.
In February and March 2013, Petron raised a total of $750 million from two offerings of perpetual securities priced at 7.5 percent. The first offering, worth $500 million, closed on February 6. Another $250 million was offered in a reopening of the offering, which ended on March 11.
In October last year, Petron announced that it intended to issue new undated securities to repurchase, refinance, or redeem $750 million in undated subordinated capital securities issued in 2013.
Petron, which supplies almost 40 percent of the country’s oil requirements, has a combined retail network of almost 2,900 service stations, more than a fifth of which are in Malaysia.
Shares of Petron closed at P9.35 apiece.