by ALIFAH ZAINUDDIN
PETRONAS Dagangan Bhd (PetDag) is divesting its liquefied petroleum gas (LPG) enterprise in the Philippines via a US$124 million (RM532.5 million) deal.
In a filing exchange yesterday, the domestic arm of Petroliam Nasional Bhd (Petronas) noted its wholly owned unit PDB (Netherlands) BV (PDBN) had entered into two share purchase agreements (SPAs) with the Philippines’ leading independent oil firm, Phoenix Petroleum Philippines Inc, to sell 100% of its stake in Petronas Energy Philippines Inc (Pepi) and 40% equity interest in Duta Inc.
The SPAs were signed by PetDag MD Datuk Mohd Ibrahimnuddin Mohd Yunus and Phoenix Petroleum president and CEO Dennis Uy.
PetDag said the move was part of the company’s regular review of its portfolio of businesses and geographies in which it operates and the sale is expected to result in a gain of RM369.5 million to PetDag and its subsidiaries.
The oil and gas retailer also said the disposal consideration was arrived at on a willing-buyer willing-seller basis after taking into consideration the audited financial performance of Pepi and Duta for the financial year ended Dec 31, 2016 (FY16), as well as the RM218.8 million combined assets of both entities.
The divestment is expected to be completed in the third-quarter of 2017 upon the fulfilment of all conditions and will be satisfied entirely through cash.
Maybank Investment Bank Bhd acted as the financial advisor to the firm on the disposal.
According to PetDag, proceeds from the divestment will be utilised for the group’s future capital expenditure for 2018 until 2020.
The sell-off, however, does not involve any issuance of new PetDag shares, hence it will not have any effect on the issued share capital of PetDag and substantial stakeholders’ shareholdings in the company.
Additionally, the divestment is not expected to have any other material effect on the earnings of PetDag for FY17.
The company had earlier signed a memorandum of understanding (MoU) with Phoenix on May 24 in relation to the proposed divestments of PDBN’s shares in Pepi and Duta. Both parties had agreed to submit their applications to the Philippine Competition Commission for approval to complete the transactions.
The MoU also noted that Alsons Consolidated Resources Inc and Masaligan Inc will collectively hold the remaining 60% equity interest in Duta.
The liquidation of PetDag’s business in the Philippines came less than a month after it sold its Vietnam-based unit Thang Long LPG Co Ltd to Noi Thuong Bac Joint Stock Co for an undisclosed fee. It said the divestment is pursuant to PetDag’s portfolio rationalisation.
The firm’s previous attempt to dispose of Thang Long to Totalgaz Vietnam LLC fell through in January, but no reason was given for the termination.
PetDag’s shares closed lower by six sen, or 0.25%, to close at RM24.10 yesterday, with 435,900 shares changing hands. It has a market capitalisation of RM23.92 billion.