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Friday, October 7, 2022

Shell using ₧6-B bank loan to pay other debts

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PILIPINAS Shell Petroleum Corp. obtained a P6-billion loan from a local bank mainly to repay its short-term loan.

“Following a competitive tender process and pursuant to the endorsement from the Related Party Transaction Committee and Board approval, Pilipinas Shell Petroleum Corporation [SHLPH] secured a five-year loan amounting to P6 billion with the Bank of the Philippine Islands, replacing an existing P6 billion of short-term loan,” the listed oil firm said.

The loan will reduce the oil firm’s exposure to short-term volatilities in the market and maximize the low interest rate for its cash requirements. “This will not impact the gearing of SHLPH which remains healthy,” it said.

The oil firm said last week that it would pay “under protest” P3.49 billion in excise tax and value-added tax on importations of alkylate from 2014 to 2020.

In a December 13 disclosure to the Philippine Stock Exchange (PSE), Pilipinas Shell said the Bureau of Customs (BOC) already recognized its “intent to pay under protest” the amounts demanded by the Port of Batangas on the heels of the Supreme Court’s (SC) decision to dissolve its TRO (temporary restraining order) dated July 7, 2014.

“This will allow us to continue to provide to our customers and to the general public who rely on our products and mindful of the thousands of Filipinos whose livelihood depends on our ability to maintain our operations,” said the oil firm earlier.

The case originated from a Court of Tax Appeals (CTA) case wherein the oil firm questioned the validity of documents from the Bureau of Customs’ Port of Batangas collector compelling it to pay P1.99 billion in “deficiency excise taxes, inclusive of interest and penalties, for its alkylate importations between January 2010 to June 2012.”

The SC ruled that alkylate, a product of distillation, is subject to excise tax under Section 148 of the National Internal Revenue Code as amended.

Pilipinas Shell maintained that “the case on whether Alkylate is subject to excise tax is yet to be decided by the courts.”

At end-September this year, Pilipinas Shell reported a net income of P3.4 billion, a  reversal fom P13.9-billion loss in the same period last year.

Read full article on BusinessMirror

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