Investors back PETROSOL with GH¢178m bond bids

PETROSOL Platinum Energy PLC has secured a strong vote of confidence from investors after its maiden GH¢100 million corporate bond was oversubscribed by 178 per cent, reflecting significant institutional demand for the indigenous oil marketing company's debt securities.

The company's Series 1 and Series 2 Notes have subsequently been listed on the Ghana Fixed Income Market (GFIM) of the Ghana Stock Exchange (GSE).

The listing represents the first issuance under PETROSOL's GH¢200 million Note Issuance Programme, which was approved by the Securities and Exchange Commission (SEC) and the GSE.

The book build attracted combined bids of GH¢178.074 million, against the initial target of GH¢100 million.

The strong subscription is being viewed as an indication of investor confidence in PETROSOL's business model, corporate governance, financial credibility and growth prospects.

The four-year Series 1 Notes attracted GH¢114.277 million in bids against a target of GH¢50 million, representing a 229 per cent subscription from 66 investors.

The five-year Series 2 Notes, meanwhile, received bids worth GH¢63.797 million against a GH¢50 million target, representing a 128 per cent subscription from 18 investors.

Despite receiving substantially more demand than the amount initially targeted, PETROSOL opted to accept only the GH¢100 million planned for the first issuance.

Management said the decision reflected its commitment to financial discipline and responsible capital management.

Speaking at the listing ceremony in Accra, PETROSOL Platinum Energy PLC Chief Executive Officer Michael Bozumbil said the successful bond issuance fulfilled a long-standing ambition to access Ghana's capital market.

He said the company would retain the remaining GH¢100 million under the programme and return to the market when the timing was considered appropriate.

“We are working with the GH¢100 million. We will come back at the right time for the extra GH¢100 million because we want to remain financially disciplined,” Mr Bozumbil said.

He explained that the funds raised would primarily be used to strengthen PETROSOL's working capital position and improve the efficiency of its fuel procurement operations.

The company also plans to use the funds to expand its retail network and grow its business-to-business petroleum supply portfolio.

PETROSOL began as a petroleum business management and consulting firm before entering Ghana's oil marketing industry in 2013.

The company commenced oil marketing operations in 2014 with just four stations.

It has since expanded significantly and now operates 109 stations across 13 regions, employing approximately 490 people.

Mr Bozumbil said the company had cumulatively paid more than GH¢2 billion in taxes and regulatory margins since 2014.

He added that PETROSOL had consistently met its financial obligations to banks, suppliers, dealers and employees.

The CEO acknowledged that the company's growth had taken place amid several challenges in Ghana's petroleum downstream sector, including the energy crisis, deregulation, currency volatility, high inflation and intense competition.

The Managing Director of the Ghana Stock Exchange, Abena Amoah, described PETROSOL's successful bond issuance as an important development for Ghana's corporate bond market.

According to her, corporate issuers have raised approximately GH¢24 billion since Ghana's corporate bond market was established in 2015.

She also noted that fixed-income trading volumes had continued to recover strongly following the implementation of the Domestic Debt Exchange Programme (DDEP).

The successful PETROSOL issuance, she said, demonstrates the continuing role of Ghana's capital market in mobilising long-term funding for businesses.

The Chief Executive Officer of the Ghana Investment Promotion Authority (GIPA), Simon Madjie, who delivered the keynote address, said PETROSOL's listing demonstrated how Ghanaian companies could use the capital market to access long-term financing while strengthening corporate governance and diversifying their funding sources.

He, however, cautioned that becoming a listed issuer comes with significant responsibilities.

These include timely disclosure, sound financial controls, effective risk management and meeting all obligations to investors.

Mr Madjie urged PETROSOL to maintain the standards that have contributed to investor confidence in the company and to use the new source of financing to support sustainable growth.

PETROSOL's maiden corporate bond issuance highlights the growing potential for indigenous Ghanaian companies to access the domestic capital market rather than relying exclusively on traditional bank financing.

The 178 per cent oversubscription also provides a strong indication of investor appetite for well-structured corporate debt instruments, particularly from established companies with clear expansion plans and a track record of meeting their obligations.

For PETROSOL, the GH¢100 million raised is expected to provide additional financial capacity to expand its retail footprint, strengthen fuel procurement and deepen its presence in Ghana's competitive downstream petroleum market.

The company now has the option of returning to the market for the remaining GH¢100 million under its approved Note Issuance Programme when market conditions and its financing requirements make it appropriate.