1 week ago
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Cebu-based fuel distributor Top Line Business Development Corporation (Top Line) is negotiating with a potential strategic investor that will come it during the firm’s planned ₱900 million initial public offering.
During a media briefing, Top Line Chairman, President and CEO Eugene Erik C. Lapasaran Lim said “we basically moved the (IPO) schedule beause we were talking to potential institutional investors to come in.”
Top Line Chairman, President and CEO Eugene Erik C. Lapasaran Lim“In fact, its not only a potential investor. It’s a strategic investor in a logistics standpoint... So far, they have show a lot of interest coming in... We’re still waiting but we’re hopeful that they will be joining us,” he added.
The firm recently reduced its IPO size from ₱3.15 billion to ₱900 million by reducing the number of shares and the offering price as well as adjusted the allocation of expected proceeds.
“This decision reflects changes made to the IPO Offer structure to accommodate potential block investments from institutional investors,” Top Line said.
The Company expects to raise up to ₱764.2 million in net proceeds from the sale of up to 2.15 billion primary common shares at an indicative offer price of up to ₱0.38 per share subject to a bookbuilding process.
Top Line seeks to use the net proceeds for its vertical integration strategy which will allow it to manage key aspects of its operations from sourcing to distribution, representing both its commercial fuel trade and retail market segments.
“In view of the feedback from potential institutional investors, we have updated our expansion plans and IPO proceeds to focus on growing our current depot space, improving our importation processes, and expanding our operations.
“This approach will help us strengthen our market position to reliably supply fuel in the high-growth Central Visayas region and deliver more value to our shareholders in the long run,” said Lim.
Top Line Light Fuels station perspectiveTop Line intends to use a portion of the net proceeds for the construction of additional 20 service stations under the Light Fuels brand expected to be operational within 2025 to 2026.
With an emphasis on the underserved sectors, Light Fuels will include Light Fuels Express stations among the target service stations. Express stations are designed with smaller space requirements and high motorcycle service turnovers.
Currently, Light Fuels has four operational stations while six fuel stations are in various stages of construction and development. By the first quarter of the year, the Company aims to have 10 operational stations, including three Light Fuels Express.
Subject to market conditions and project timelines, Top Line is targeting an expanded network of 30 operational Light Fuels stations by 2026 which includes the 20 stations to be funded by the IPO’s net proceeds.
The Company also seeks to acquire one fuel tanker with a capacity of five million liters to enhance its fuel storage capabilities and ensure a reliable supply chain.
A portion of the net proceeds will also be allotted for working capital requirements for the fuel stock sourced from local and foreign suppliers. The rest of the proceeds will be used for general corporate purposes.
Top Line's depot silos
The construction of additional depot facilities initially included in the Company’s Prospectus filed last year will now be funded from other sources and not from the IPO proceeds.
“Through vertical integration, we are enhancing control over supply chain risks, paving the way for healthier profit margins, improved supply stability, and consistent product quality. The increased operational efficiency will sustain our expansion and growth momentum,” Lim added.
