DOE to Shell: Conduct IPO now
MANILA, Philippines - The Department of Energy (DOE) has asked Pilipinas Shell Petroleum Corp. to proceed with its long-delayed initial public offering (IPO), saying prevailing market conditions are ripe.
Energy Secretary Carlos Jericho Petilla said the Energy department has sent a letter to Shell country chairman and president Edgar Chua reminding the oil refiner of its obligation to list its shares on the local bourse as mandated by the Downstream Oil Deregulation Act of 1998.
The law requires all oil refiners to sell at least 10% of their common shares to the public.
"The market right now is ripe with all the upgrades and everything else that is why we are calling them," Petilla said.
In a letter to Shell, Zenaida Monsada, director of the Energy department’s Oil Industry Management Bureau, told the company its IPO is long overdue.
"While the opinion of the Department of Justice is that the 3-year period under the Oil Deregulation Law is not mandatory but prescriptive and will not prohibit an IPO to be conducted after the lapse of the said period, nearly 15-year period since the passage of the law is long overdue for PSPC to implement the public offering of 10% of its common stock," Monsada said.
"Given also that the equity/financial market environment in the country is currently healthy, which attracts potential investors, you are hereby requested to submit an update of your IPO plans," she added.
Shell requested for a meeting with energy officials to update them on its plans.
The main Philippine Stock Exchange index (PSEi) already breached the 7,000 mark on continued investor appetite.
On Wednesday, May 29, the PSEi settled at 7,228.57, up 1.62% or 115.35 points from Tuesday's close. The Philippine stock market was among the world’s best performing markets in 2012. - Rappler.com