Petron says may sell local currency bonds

Reuters

Posted at Oct 05 2010 06:49 PM | Updated as of Oct 06 2010 02:49 AM

MANILA, Philippines - Oil refiner Petron Corp., partly owned by conglomerate San Miguel Corp., is studying a possible local currency bond offer to raise funds for its refinery expansion, its president said on Tuesday.

Eric Recto said no decision had been made on the amount and timing of any bond offer, or whether the bonds would be sold locally or offshore.

The government sold $1 billion of a maiden issue of global local currency bonds last month.

"Petron is considering a fundraising exercise and one option would be a peso bond," Recto said in a mobile text message to Reuters. "We need to prepare for the capital demands of our new projects, most significant of which is the refinery expansion."

Shares of Petron closed steady at P6.88 on Tuesday in a market that fell 0.39%.

They hit a high of P7.90 last week, their strongest since May 1997, on a newspaper report the company had increased planned investment to upgrade its refinery and petrochemical business.

On Tuesday, Petron said it invested P339.99 million ($7.7 million) in a new company it had formed with an unlisted partner for its foray into power generation.

The company, Limay Energen Corp., will have an authorized capital stock of P3.4 billion, of which P850 million has been subscribed and P212.5 million paid up, according to a report by The Philippine Star newspaper.

Petron intends to build a 70-megawatt power plant worth P5 billion within its refinery in Limay in Bataan province northwest of the capital, the newspaper report said.