Phoenix Petroleum settles P3.08-B worth of CP

Published July 28, 2021, 3:03 PM

by Myrna M. Velasco

As part of its balance sheet improvement strategy, Uy-led Phoenix Petroleum Philippines Inc. has settled P3.083 billion worth of commercial papers (CP) that had fallen due recently.

The oil firm specified that the settlement of its CP series D “was funded by a mix of internal funds and financing support from established institutional creditors.”

In a statement to the media, Phoenix Petroleum President Henry Albert Fadullon noted that “the settlement of the CP is an overall reduction in our indebtedness, which improves our leverage and liquidity profile.”

The payment of that fraction of the firm’s financial obligations, according to the company executive, “puts us in a firmer footing, and positions us well into the second half of the year.”

Fadullon said the CP program of the company “has always been well-supported by both retail and institutional investors,” and that the firm so far gained the opportunity “to offer such instruments that benefit the investors, and support our growth.”

Onward, the company executive indicated “we are building on the progress of the past quarters as we prioritize our people’s safety; our customers’ needs; and preservation of resources.”’

Phoenix Petroleum is still ranked this year as the third biggest player in the downstream oil sector – a climb into the ‘Big 3’ league that it first clinched last year.

“Amidst the persistent challenges, so far this year, we generated record-high quarterly volume in the second quarter on the back of our fuels and LPG businesses,” the oil firm chief executive said.

Fadullon stressed “with this improvement in sales, along with our sustained efforts to prudently manage our costs and capital, we have been able to shorten the cash cycle and gradually deleverage.”

The company also previously laid down plans “to enter into negotiations with third party or any other entity for the possible disposition of certain assets of the company.”

On the whole, Phoenix Petroleum said it will target “higher returns on invested capital due to increased efficiency and utilization of assets; lighter fixed asset base and decreased operating expenses; and improved credit risk profile and lower borrowing costs.”

Part of its financial reinforcement plan is to also “continue to term out and refinance portion of short-term debt to lengthen maturities.”

Despite fuel demand recovery in recent months, however, new round of uncertainties may impact on sales of the oil companies again, especially with anticipated lockdowns that may be enforced by the government because of Covid-19’s Delta variant.

 
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