The fast-growing Cebu-based fuel trading and retail group is closing in on a strategic partner to secure a sizeable stake, effectively backstopping the deal and setting the stage for the first listing of 2025.
“We’re in advanced talks right now with our investor. We will know soon when we do the offer period,” Eugene Erik Lim, Top Line’s chair, president, and CEO, told reporters during a Wednesday media briefing in their new office in the Philippine Stock Exchange Tower, Bonifacio Global City.
“The books are slowly being filled as we speak because we’re doing the book-building process now. Potentially, we’re looking at a substantial strategic investor [for the IPO],” he added.
Strategic investor
Lim said the strategic partner will bring in expertise on the logistics side.
This also helps ensure the success of the IPO, similar to how tycoon Edgar Saavedra secured the participation of the UK government’s MOBILIST program, which purchased a sizable allocation when Citicore Renewable Energy listed in 2024.
Lims adjust strategy
Their discussions with investors also led the nearly eight-year-old company to rethink its strategy and expansion plans.
Lim explained they were willing to downsize the initial offer size from as much as P3.2 billion to roughly P900 million, of which P816 million will be used for their expansion.
“The last time, we moved to reschedule [the IPO] because we’re talking to potential institutional investors that do want to come in,” he said. “So far, they’ve shown a lot of interest in coming in.”
Key dates
According to its latest timetable, the IPO will be priced on March 17, while the offer period will run from March 24-31.
The target listing date under the stock symbol “TOP” is April 8, 2025.
Repositioning IPO proceeds
The company will raise net proceeds of up to P764.2 million, which will help bankroll the opening of 20 new service stations under Light Fuels between 2025-2026.
The company is allocating 39.2 percent for new retail stations, 23.6 percent for new fuel tankers, and 35.3 percent for working capital. The remainder will be used for general corporate purposes.
It was previously planning to allocate spending on fuel depots to raise capacity by around 500 percent, but Lim said this would no longer be part of their near-term plan, given their shifting focus on network integration, imports, and distribution network via Light Fuels.
“It’s basically more efficient deployment of capital,” he said.
Preparing to list
Top Line, which will also be the first Cebu-based firm to list since the Soberano family’s Cebu Landmasters went public in 2017, is selling up to 22 percent of its shares to the public at up to P0.38 apiece.
This would value the company at about P4.1 billion.
The offer is being supported by Investment & Capital Corporation of the Philippines and Lucio Tan’s PNB Capital and Investment Corp.
Robust earnings
Top Line saw net income surge 157 percent to P90.5 million during the first nine months of 2024, while revenues reached P2.4 billion, up 9.1 percent.
More than 97 percent of earnings come from fuel trading; however, the firm aims to diversify by growing income from its retail network.
“We believe in our IPO story, our growth, and our strategy,” said Atty. Constance Marie Lim, chief financial officer and director of Top Line.
Apart from the Lim siblings, Top Line is being run by former Petron Corp. officials Alvin L. Lato, head of commercial fuel trade, and Dwight Christian Jonas S. Villon, retail trade manager for Light Fuels.
Capturing growth in Central Visayas
Top Line wants to tap into Central Visayas’ P1.38 trillion economy and Cebu Province’s 9.02 percent fuel consumption growth.
Their expansion strategy is backed by a University of Asia and the Pacific study showing strong regional fuel demand.
The study noted Central Visayas’ economy grew 7.46 percent in 2023, outpacing the national rate of 5.5 percent. The region, which includes Cebu, Bohol, Negros Oriental, and Siquijor, is the largest market outside Luzon.
Defying volatile conditions
The company is staying bullish despite market volatility, as its IPO launches with the Philippine Stock Exchange index down about 6.22 percent, weighed down by global uncertainties.
“We don’t have a crystal ball. The market is like that, up and down. But what we believe in—and are confident in—is Top Line’s performance,” said Brigitte Carmel Lim, Top Line chief operations officer and director.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
