Tuesday, October 07, 2008 PNOC to sell Petron shares
THE state-run Philippine National Oil Company (PNOC) is selling its 40 percent stake in Petron Corporation for a price of P6.85 per share.
Nicasio Alcantara, chairman and chief executive officer of Petron, said PNOC already notified them of the intended sale through a transfer notice sent to Ashmore Group.
PNOC’s 40 percent stake in Petron was equivalent to 3.75 billion shares. Under the shareholders agreement, Ashmore has 60 days from the receipt of the notice or until December 6, 2008 to exercise its right of first offer.
Energy Secretary Angelo Reyes said the decision to sell PNOC’s share in Petron is part of the government’s efforts to improve its fiscal position and raise funds to finance the infrastructure and pro-poor projects.
Despite the impending sale, Alcantara assured their customers that they will still focus on growing the business.
“A change in ownership should not alter the company’s solid fundamentals and its ability to flourish in a dynamic environment. Petron is a strong stand-alone company with undisputed leadership in the oil industry, an extensive customer base, and robust strategic initiatives to sustain its growth momentum. We will remain focused on our business imperatives to add more value for our shareholders,” Alcantara said.
Being the market leader, Petron launched a new vision and mission in 2004, identifying strategic business imperatives such as the diversification into the production of petrochemical feedstocks and expansion of its non-fuel business.
Ashmore’s decision to invest in Petron is an endorsement of our diversification strategy and the Philippines as an investment location, Alcantara added.
In the first quarter of this year, Petron commissioned the first phase of a US$300 million petrochemical facilities upgrade at its Bataan refinery.
The company’s Petro Fluidized Catalytic Cracking (PetroFCC) unit and Propylene Recovery unit enable the production of more white products and the high-value petrochemical feedstock propylene.
Likewise, Petron opened a blending plant in Subic Bay recently with an annual capacity to produce 12,000 metric tons of fuel additives. It is now sourcing its additive requirements for its fuel brands, such as XCS Plus and DieselMax, from this facility. This is expected to generate cost savings for the company and provide an additional revenue source.
In July, SEA Refinery Holdings BV, a company owned by the Ashmore Group, completed the acquisition of Aramco’s 40 percent stake in Petron for US$550 million. It also bought an additional 10.57 percent of Petron shares following a mandatory tender offer.
Last month, Finance Secretary Margarito Teves announced that the PNOC board of directors has finally agreed to the sale of the government’s remaining stake in Petron.
Teves hoped that P41 billion would be raised from the sale of Petron and from the PNOC-Exploration Corp. (EC), another subsidiary of PNOC. The bidding is expected to take place on or before December 30.
Last May, London-based Ashmore bought the 40 percent stake of Saudi Aramco in Petron for US$550 million and tendered for the remaining 60 percent of about US$827.23 million.
The oil company has 9.375 billion outstanding shares and a market capitalization of P55.3 billion.
In 1994, the Philippine government sold its 40 percent share in PNOC to Aramco for US$535 million; and it was agreed that PNOC would be given the right to match or assign an eligible party should the Saudi-based oil company decide to sell its shares. (MSN/Sunnex)
