CEBU-BASED fuel retailer Top Line Business Development Corp. (Topline) said it is in talks with a “substantial strategic investor” as it prepares for its P900-million initial public offering (IPO).

“Potentially, we’re looking at a substantial strategic investor coming in. It’s a strategic investor from a logistics standpoint. We’ve already spoken with them. They’ve shown a lot of interest,” Topline Chairman, President, and Chief Ex-ecutive Officer Eugene Erik C. Lim said during a media briefing in Taguig City on Wednesday.

“We’re in advanced talks right now, and we’ll know soon when we do the offer period because we’re doing the book-building process now,” he added.

Mr. Lim said the entry of the strategic investor will coincide with the company’s planned IPO.

“We’re still waiting until the book-building process is finished. But we’re hopeful that they’ll be joining us,” he said.

Topline previously reduced the size of its IPO to P900 million from the initial P3.16 billion after discussions with potential institutional investors.

The IPO now consists of up to 2.15 billion primary common shares with an overallotment option of up to 214.84 million secondary shares, priced at up to 38 centavos per share.

Based on its latest prospectus dated Feb. 25, the book-building period for the IPO began on Feb. 27 and will run until March 14, while the price-setting date is scheduled for March 17.

The offer period for Topline’s IPO will be from March 24 to 31, with a target listing date of April 8.

Mr. Lim said the allocation of the IPO proceeds has been adjusted to align with near-term expansion plans.

The company aims to raise up to P764.2 million in net proceeds, which will be used for its vertical integration strategy to manage its commercial fuel trade and retail market operations.

“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 said.

Topline will allocate P300 million of the net proceeds to build 20 additional service stations under the Light Fuels brand, which are set to become operational between 2025 and 2026.

Light Fuels currently has four operational stations, while six fuel stations are in various stages of construction and development. The company aims to have ten operational stations by the first quarter of the year.

By 2026, Topline expects to have 30 operational Light Fuels stations, including the 20 stations to be funded by the IPO proceeds.

The company will also allocate P180 million for the purchase of a fuel tanker with a 5-million-liter capacity to enhance its fuel storage facilities.

Additionally, P270 million will be set aside for working capital requirements, while P14.2 million will be allocated for general corporate purposes.

The construction of additional depot facilities, initially included in the company’s prospectus filed last year, will be funded through other sources outside of the IPO.

“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 ex-panding our operations,” Mr. Lim said.

“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,” he added. — Revin Mikhael D. Ochave