Pilipinas Shell to proceed with initial public offering

Pilipinas Shell Petroleum Corporation announced that it has received the approval from the Shell headquarters in The Hague, Netherlands, to proceed with its long-awaited initial public offering (IPO). Preparations are now underway for the listing, according to Shell Vice President Ramon del Rosario, after the Philippine Board approved the listing.

The timing and size of the initial public offering remains to be decided by Pilipinas Shell’s financial advisors JP Morgan and BPI Capital Corporation, he added. Initial assessments have placed Pilipinas Shell assets between USD 3.0 billion and USD 5.0 billion. A minimum float of 10% would mean that the IPO could raise USD 500 million.

The IPO mandate is prescribed for companies which are engaged in petroleum refining, under the Philippine Downstream Oil Industry Deregulation Act. The intent of the law is to widen the base of public ownership of such firms. But while the mandate prescribed that the IPO must be undertaken within three years after deregulation in 1998, the Philippine Department of Justice has allowed a liberal interpretation of the timeframe prescription, allegedly due to unfavorable market conditions in the past.