PHOENIX Petroleum Philippines, Inc., the country’s leading independent oil company, announced that it had sold more than 70 million treasury shares to raise funds to pare down its debt.
Upon securing the approval of the board of directors, Phoenix Petroleum informed the Philippine Stock Exchange (PSE) on Thursday that it sold 70,193,400 treasury shares at the market price of P11.50 a share on October 30.
The selling price was higher than the stock’s closing price of P11.42 apiece on Oct. 27 and slightly lower than its 30-day volume weighted average price (VWAP) of P11.657/share.
Phoenix Petroleum could raise up to P807.22 million from the transaction which it intends to use “to retire existing debt that has increased due to the acquisitions and investments made by the Company since the start of the year.”
On the day the company sold treasury shares, it announced its acquisition of FamilyMart from the Ayalas and Tantocos, marking its venture into the convenience store space.
Phoenix Petroleum also entered Singapore’s fuel market last month by establishing a trading company to facilitate and negotiate the supply and trading of its petroleum products and to engage in the trading business to eventually serve other third parties and customers.
In August, it completed the purchase of 100 percent of PDB’s shares in Petronas Energy and in Duta, Inc. in a bid to expand its liquefied natural gas (LNG) portfolio.
Phoenix Petroleum commenced a share buyback program in May 2016 starting with P250 million worth of shares. Eventually it was increased to P750 million worth of common shares.
In a text message, Phoenix Petroleum Vice President for External Affairs Alan Raymond Zorilla said the program enables the company “to buy back its own common shares from the market. This shows how strong management believes in the company.”
Through this, “we bought back our own shares and accumulated 70.1 million shares. With [the]board approval now, we sold all the shares we bought back at P11.50 per share,” Zorilla said.
He added that all repurchased shares automatically became treasury shares. Treasury stock or treasury shares are the portion of shares which a company keeps in its own treasury, which may have come from a repurchase or buyback from shareholders, or may have never been issued to the public.
These shares hold no voting rights, do not pay dividends, and should not be included in shares outstanding computations.
Incorporated in 2002, the Davao-based company is in the business of trading and marketing refined petroleum products and lubricants, operating oil depots and storage facilities, hauling, and into-plane services.
Shares of Phoenix Petroleum added P0.28 or 2.43 percent to close at P11.78 on Thursday.