Petron discloses initial dividend rate for P17-b preferred shares

San Miguel-led Petron Corp. set the initial dividend rate for its planned P17-billion preferred shares offering.

Petron said in a disclosure to the stock exchange Friday the Series 4D preferred shares would have a dividend rate of 6.8364 percent annum for the next five years, after which the company would have to pay higher rates based on the prevailing seven-year benchmark plus a spread of 3.25 percentage points.

Series 4E preferred shares will carry an initial dividend rate of 7.1032 percent annum for the next 10 years.

If unredeemed on the 10th year, Petron will have to pay higher rates based on the prevailing 10-year benchmark plus a spread of 3.25 percent.

Petron plans to sell 13 million preferred shares with an oversubscription option for another 4 million shares at P1,000 apiece.

The preferred shares will be issued as second tranche from the company’s 50 million preferred shares shelf-registration program approved by the Securities and Exchange Commission (SEC) in 2023.

Petron said that in case the oversubscription shares are exercised in full, it would still have 19 million preferred shares under its registration program which it could issue until June 2026.

Offer period will start on Sept. 5, 2024 and end of Sept. 13, 2024.

The preferred shares will be listed in the main board of the Philippine Stock Exchange on Sept. 23, 2024.

The company said it would use the proceeds from the fund-raising activity to redeem the Series 3A preferred shares, refinance maturing obligations and fund general corporate purposes including purchase of crude oil inventory.

Six banks including Bank of Commerce, BDO Capital & Investments Corp., China Bank Capital, PCCI Capital, PNB Capital and SB Capital were engaged as joint lead underwriters for this transaction.

Petron is the only integrated oil refining and marketing company in the Philippines and is a leading player in the Malaysian market.

It operates a refinery in Bataan with a production capacity of 180,000 barrels per day, supplying 40 percent of the country’s total fuel requirements. It had a network of 1,800 retail service stations as of end-June 2024.