Trans-Asia unit debuts strongly in dull mart
Posted on August 28, 2014 10:35:00 PM
Businessworld Online
By Claire-Ann M. C. Feliciano, Senior Reporter
TRANS-ASIA Petroleum Corp. surged in its market debut yesterday to buoy the mining and oil index, to which it belongs, into green territory when all other sectors ended with losses.
The oil and gas firm, which listed by way of introduction, gained P2.80 or 60.87% to finish P7.40 apiece from a P4.60 listing price. Its shares hit a high of P9 apiece within the first hour of trading and sank to a low of P6.51.
It was one of six among the 18 mining and oil issues that finished trading with gains, driving the sectoral index up 57 points or 0.33% to settle at 17,494.80 — the only one among six indices to end the day with gains.
The 30-company Philippine Stock Exchange index shed 59.76 points or 0.83% to close 7,100.70, while the all-shares index finished 26.14 points or 0.62% weaker at 4,205.66.
Initially valued at P1.15 billion, the company listed 250 million shares under the stock symbol “TAPET.”
Astro C. del Castillo, managing director at brokerage First Grade Finance, Inc., said Trans-Asia Petroleum’s performance on its first day was backed by investor confidence. “Historical background and affiliate companies generated interest in TAPET and its potential as an oil and gas company,” he said in a phone interview. “Demand also pushed the price. In the coming days, we expect a reality check and then we’ll find out its stable market price.”
The newly listed company joined parent Trans-Asia Oil and Energy Development Corp.’s (TA Oil) — which transferred ownership in Trans-Asia Petroleum to its shareholders through property dividend distribution involving 123,161,310 shares. Each TA Oil shareholder owning 100 shares got 2.55 shares in Trans-Asia Petroleum.
Trans-Asia Petroleum Vice-Chairman Oscar J. Hilado said the company’s entry into the equities market will give it “flexibility in meeting investment opportunities and operational commitments of the company.”
“We hope that our continuing efforts in upstream oil and gas exploration would bring our country closer to its much-needed energy resources in order to sustain economic growth and support nation building,” he said during yesterday’s listing ceremony.
MORE FUND-RAISING EYED Following the listing, an official also bared the company’s plan to raise around P500 million via stock rights offering to support its projects.
“The rights offer we’re contemplating will be around P500 million. We hope to do that that by the end of the year or early next year,” Pythagoras L. Brion, Jr., executive vice-president and treasurer, said in a briefing, even as he declined to give more details of the planned capital raising.
Just last Wednesday, Trans-Asia Petroleum moved to acquire 10% in Service Contract (SC) 50 located in waters northwest of Palawan. “We expect to sign definitive agreements within one month,” Raymundo A. Reyes, Jr., executive vice-president, said in the same briefing.
The official noted that the contract area — which covers the Calauit oil field — has proven reserves and production in the field is expected to start next year.
Of Trans-Asia Petroleum’s existing contracts, the most advanced is SC 55 (with 6.82% stake) — a project undertaken in partnership with Australia’s Otto Energy Ltd.
The company also holds interests in SC 51 (6.67%), SC 6A (2.33%) and 6B (4.06%), and SC 69 (6%). All these projects, according to Mr. Reyes, are under various stages of exploration.
Before Trans-Asia Petroleum, three other firms joined the bourse this year. Top Frontier Investment Holdings, Inc. listed by way of introduction last January, marking the first market debut for 2014. Two others — DoubleDragon Properties Corp. and Century Pacific Food, Inc. — conducted initial public offerings (IPOs) last April and May, respectively.
Luxury brand retailer SSI Group, Inc.; Amicus Holdings, Inc. (the holding entity of developer Property Co. and Friends, Inc.); and technology firm Xurpas, Inc. also plan to do IPOs this year to raise P12.4 billion, P7.7 billion and P1.4 billion in fresh funds, respectively.
Ten firms listed on the PSE last year, namely: Philippine Business Bank, Asia United Bank Corp., Del Monte Pacific Ltd., AG Finance, Inc., Harbor Star Shipping Services, Inc., Emperador, Inc. Travellers International Holdings, Inc., Robinsons Retail Holdings, Inc. Discovery World Corp., and Concepcion Industrial Corp. Eight conducted IPOs, while Singapore-listed Del Monte listed by way of introduction and Emperador went the backdoor route via Touch Solutions, Inc.