Leading oil industry player Petron Corporation is slated to offer this year $500 million worth of senior notes, the proceeds of which will be used for debt refinancing as well as to augment working capital that will bankroll its on-the-fence power project at the Limay refinery, according to Petron President and CEO Ramon S. Ang.

In a disclosure to the Philippine Stock Exchange (PSE), the oil firm stated that the executive committee of its board of directors had already greenlighted the notes issuance in their meeting on Wednesday, Jan. 12.

”The Executive Committee authorized the company to offer and issue US dollar-denominated senior notes up to an amount of $500 million,” Petron said, albeit qualifying that the terms and conditions of the notes issuance will have to be firmed up yet by the company management.

In a preliminary offering circular issued by the company, it was stated that the sole global coordinator will be HSBC Bank while the joint lead managers and joint bookrunners would be DBS Bank Ltd., HSBC, MUFG, SMBC Nikko, Standard Chartered Bank and UBS.

“The notes will be issued in registered form in the denomination of $200,000 each and integral multiples of $1,000 in excess thereof,” Petron emphasized.

The expected issue date as well as the maturity of the notes and the option for redemption are still up for determination of the oil firm’s management.

“The net proceeds from the issue of the notes will be applied by the company for the repayment of indebtedness and for partial financing of the power plant project,” the oil firm reiterated.

Petron announced last year the planned 44-megawatt expansion of its existing 140-MW power plant, which has been catering to the electricity needs of its refinery in Limay, Bataan.

As targeted, the power facility’s expansion is due for completion second half this year – and once on stream, total generation will already be ramped up to 184 megawatts.

The power plant has been technically designed to provide electricity supply as well as the steam requirements of Petron’s Limay refinery which has capacity yield of 180,000 barrels per stream day.

The downstream oil industry had been among the businesses afflicted by the Covid-19 pandemic, but Petron as the country’s leading oil firm and the only one with refining facility, had proven financial resilience as it already logged income turnaround last year.

The relentless economic strain triggered by the coronavirus pandemic is still affecting mobility of people -- that in turn, has been impacting on the sales volume of oil companies, but even with the widespread infection caused by the Omicron variant in the country, the oil sector deems this to be a temporary snag rather than a long-lasting predicament.