Foreign, domestic shipping firms offer to aquire 60% of PNOC shipping unit

Several foreign and domestic shipping firms have offered to acquire at least 60 percent of PNOC-Shipping Transport Corp. (PSTC), the shipping arm of state-owned Philippine National Oil Corp. (PNOC).

PSTC president Cesar Tapia, in a press conference, said the foreign and local-based shipping companies were responding to an invitation published by the company recently.

The list of prospective buyers includes five members of the Philippine Federation of Petroleum Shipping and Transport Association (Philfesta) and Maritima, a local shipping company owned by the Manalang group.

Tapia said they would select the strategic partner by June this year. "Other interested parties have until the end of this month to submit their proposals. We will come up with a recommendation on who will be chosen as a strategic partner next month," he said.

PNOC president Thelmo Y. Cunanan said if the market is favorable the privatization of PSTC could push through this year.

Cunanan said PSTC would adopt the privatization model used by the country’s oil refiner Petron Corp. when it was privatized in 1994.

"Just like Petron, we plan to sell 40 percent of PSTC to a strategic investor while PNOC keeps the other 40 percent. The remaining 20 percent, we could offer to the public. It (initial public offering) is one of the options," Cunanan said.

Cunanan said the PSTC is currently strengthening its shipping and transport operations to make it lucrative in time for its privatization.

The PNOC board approved recently the release of some P250 million, which will finance the purchase of a second-hand vessel.

At present, the company operates three tankers, namely, Bonifacio, Agoncillo and Lopez-Jaena.

"We need to have replacement because we will be retiring an old tanker in a few months," Tapia said. The vessel is capable of transporting 30,000 barrels of "white" or processed petroleum products.

Tapia said the soon-to-be acquired tanker would service Petron and other PNOC subsidiaries’ shipping needs. He said the company wants to acquire more vessels to beef up its operations.

Tapia said they have received attractive financing offers from various foreign banks.

"These banks are offering us four to six percent interest rates, much lower than the 12 to 14 percent interest rates being offered by local commercial banks," he said. The only problem, Tapia said, is that a foreign loan will need the approval of the National Government.

Tapia said they are optimistic that they would further improve their financial performance through acquisition of more vessels. Last year, the company posted a net income of P14 million.