[MANILA] Pilipinas Shell Petroleum Corp is looking to raise up to US$400 million from an initial public offering (IPO), rather than its initial target of over US$600 million, after setting a price range of 64 to 70 pesos a share, IFR reported on Thursday.
The listing will be the Philippines' third this year, after cement maker Cemex Holdings Philippines Inc raised US$466 million in July and deathcare provider Golden Haven Memorial Park Inc raised US$17 million in June.
Pilipinas Shell, a subsidiary of Royal Dutch Shell PLC , is targeting IPO proceeds of 17.6 billion to 19.2 billion pesos (S$500 million to S$548 million), reported IFR, a Thomson Reuters publication. That compared with the 29.7 billion pesos set in a preliminary IPO filing based on a maximum offer price of 90 pesos a share.
Pilipinas Shell did not reply to Reuters' request for comment on the report Bookbuilding runs from Thursday through Oct 12, after which the final price will be announced, IFR reported. The shares will be listed on the Philippines Stock Exchange on Nov. 3, IFR said.
The IPO comprises a base offer of 275 million shares plus a further 16 million shares in the event of excess demand, together accounting for 18 per cent of the firm's outstanding capital, IFR said. Primary shares make up 10 per cent of the base offer with secondary shares taking up the remainder, IFR said.
The firm initially aimed to sell 330 million primary and secondary shares.
Pilipinas Shell operates one of the Philippines' two oil refineries and competes with petroleum retailers such as Petron Corp and the local affiliate of Chevron Corp.
Its IPO comes at a time of increased volatility in the local stock market brought about by economic factors as well as concerns over President Rodrigo Duterte's war on drugs and tirades against the United States, a major trade partner.
Pilipinas Shell is required under a two-decade-old law to offer at least 10 per cent of equity to the public. But listing plans have been deferred several times due to factors such as unfavourable market conditions and refinery upgrades.
JP Morgan is the sole global coordinator for the IPO. BPI Capital is the domestic lead underwriter.