P764.2 million in net proceeds from primary offer shares to support vertical integration, providing reliable fuel supply in the high-growth Central Visayas region
Top Line Business Development Corp. (Top Line) has adjusted the allocation of expected proceeds from its initial public offering (IPO) to align more closely with its near-term strategic expansion initiatives. This decision reflects changes made to the IPO Offer structure to accommodate potential block investments from institutional investors.
The Company expects to raise up to P764.2 million in net proceeds from the sale of up to 2,148,440,000 primary common shares at an indicative offer price of up to P0.38 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,” Mr. Erik Lim, Top Line’s Chairman, President and CEO, said.
Retail segment penetration
Subject to the final offer price, Top 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. Intended to cater to two-wheeled vehicles and other light vehicles, its stations will also include a quick motorcycle wash and helmet wash area, as well as expedited payment processing and acceptance through Radio Frequency Identification (RFID)-enabled lanes for customers requiring technology-enabled transactions.
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.
Increasing fuel storage capabilities
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.
The construction of additional depot facilities initially expressed in the Company’s Prospectus filed last year will be funded from other sources external from the IPO.
“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,” Mr. Lim added.
Top Line’s target listing date is on April 8, 2025, subject to PSE’s post-approval conditions and the issuance of the Permit to Sell by the SEC.