MANILA - Petron Corp., one of the country’s major refiners, is planning to issue preferred shares to raise fund to finance its retail network expansion program and additional improvements in its Bataan refinery.

In a disclosure to the Philippine Stock Exchange, Petron said it will reclassify a total of 624,895,503 unissued common shares with a par value of P1 per share to 624,895,503 preferred shares with a par value of P1 per share.

Petron said its board executive committee has yet to decide on the specific features of the preferred shares, including but not limited to the number, price, method and timetable for the issuance.

As a result, Petron said there will be no more unissued common shares after the reclassification of the unissued common shares.

The company added that the preferred shares will comprise the increase in the corporation’s authorized stock from P10 billion to P25 billion as approved by its board on February 27 and by the stockholders on May 12; and disclosed on March 2.

In an interview, Eric O. Recto, Petron president, said whether the fund-raising activity would take place within the year still remains unclear since it is still uncertain if the market would be receptive to such activities at this point.

“Towards the end of the year, markets generally tend to quiet down,” said Recto, adding that everything is subject to market conditions.

He, however, noted that if the market opens up, the company will only proceed with the issuance of preferred shares if the prospect for raising funds is attractive.

Recto said they are looking to raise between P10 billion and P15 billion from the issuance. “But again, this is depending on what the market will show us at the time we will make a call,” he said.

Petron’s expansion program aims to further enhance customer convenience and ensure the company’s market dominance. At the heart of this program is the construction of prefabricated stations that can start with two to three product pumps but can be expanded easily as demand grows.

Another initiative is the construction of additional refinery units, including a second petro fluidized catalytic cracking unit that will enable the full conversion of residual products to more valuable gasoline, diesel, liquefied petroleum gasoline and propylene.