Local oil giant Petron Corporation is planning to raise $500 million in fresh funds from the issuance of preferred shares to finance its expansion, including a P50-million investment in three logistics projects.

The firm disclosed to the Philippine Stock Exchange (PSE), Petron said that proceeds from the preferred share issuance will be used to finance several capital and expansion projects.

The firm said that its board also approved in a special meeting the funding requests for these projects.

The disclosure did not indicate what these logistics projects will be.

However, Petron president Eric Recto said in an interview that the funds, which could amount to more than P50 million, will be used to expand their “storage facilities”.

Recto said the over P50 million financing for the projects would come from internally-generated funds.

Petron also disclosed to the PSE that its board has allowed the company to reclassify unissued common shares into preferred shares.

Recto said this will be in preparation of a planned issuance of preferred shares which is still being studied by the company.

In the same disclosure, the oil refiner said the board also gave the authority for the company to “transact with Trust Departments of Banks on investments and borrowings.”

Recto said Petron will defer its planned bond offering after it had successfully raised some P10 billion from a corporate notes issuance last May.

“The corporate notes covered our requirement for the year so we will defer the bond issuance for the meantime,” Recto said adding that they will probably undertake the bond issue sometime next year.

“At the moment, we have raised what we need from the corporate bonds, but there is a possibility that we may push through with the bond issuance by next year,” he said.

Petron earlier decided to increase the size of its corporate notes to P10 billion from P3 billion. It was supposed to issue combined corporate notes and bonds to cover for its financing requirement of about P10 billion to fund its capital expenditures.

The issue, one of the largest corporate note issuances in the history of local debt capital markets, was more than three times oversubscribed and was priced at 8.139 percent for the five year tenor and 9.329 percent for the seven year tenor.