Oil and gas firm Frontier Oil Corp. obtained bagged regulatory approval on Friday to proceed with its planned stock market debut in December.
In its recent en banc meeting, the Securities and Exchange Commission (SEC) approved Frontier Oil’s P2.2-billion initial public offering (IPO), which will be offered from November 25 to November 29 and will be officially listed at the Philippine Stock Exchange (PSE) on December 9.
“Delighted to confirm preeffective status by SEC. [The approval] sets scene for final approval by PSE next week in anticipation of early December IPO,” Frontier Oil said.
A prospectus filed with the SEC showed that Frontier Oil plans to sell up to 883.63 million common shares at a maximum price of P2.50 apiece.
The shares shall be listed and traded on the Main Board of the PSE.
According to the company, the proceeds from the public offer will be used largely for its business activities in Service Contract (SC) 50 and SC 52, while the rest will be used for working capital.
Of the P2.2 billion expected proceeds from the IPO, P1.5 billion will be allotted for SC 50 to be disbursed in the fourth quarter this year, while P256.9 million will be used for SC 52 to be disbursed in the fourth quarter this year until the second quarter of 2014.
SC 52 is an onshore block in the Cagayan Basin at the northern-most part of Luzon, while SC 50 lies in the country’s most prospective oil and gas basin in offshore northwest Palawan.
“Service Contract 50 and 52 will provide the platform for the company’s continuing growth and success. Frontier’s core focus is to finalize the two drilling campaigns, which seek to determine the commerciality of both Calauit and Nassipping,” Frontier Oil said in its preliminary prospectus with the SEC.
“In successfully doing so, the company will achieve positive cash flows, and will be transformed from a pure exploration company into one of the few oil and gas producers operating in the Philippines today,” it added.
In January, Frontier Oil expressed its intention to make its maiden share sale in the local stock market this year.
Meanwhile, other companies that will go public this year so far are Travellers International Hotel Group Inc., Harbor Star Shipping Services Inc. and Concepcion Industrial Corp., while Philippine Business Bank, Asia United Bank, Del Monte Pacific Ltd. and AG Finance Inc. have gone public earlier this year.
Madelaine B. Miraflor