Government to sell 40% stake in Petron

The government has decided to sell its 40-percent stake in Petron Corp., the country’s biggest oil refiner, and is looking to get about P25 billion, Finance Secretary Margarito Teves said yesterday.

London-based Ashmore Group which owns slightly over 50 percent of the company, has the right of first refusal, Teves said.

“The Privatization Council approved the sale on Tuesday. “Hopefully we can book the proceeds by December. Hopefully we can get P25 billion,” Teves said.

SEA Refinery Holdings BV, owned by Ashmore Investment Management Limited, agreed to buy a 40-percent stake in Petron from Saudi Aramco for $550 million earlier this year.

In June, it offered to buy the remaining 60-percent stake, or 5.63 billion shares, in Petron at P6.531 per share.

Under Philippine corporate laws, an entity buying 30-percent stake in any company must make a tender offer for the rest of the company.

At the end of the tender offer in July, SEA Refinery received tenders for a total of 990.98 million common shares, or a total of P6.5 billion, from minority shareholders, the company said in a statement to the stock exchange.

At the time, the government did not participate in the tender, saying it was hoping for a better price. Ashmore’s holding in Petron is now at 50.57 percent.

The government’s sale of its stake in Petron, meanwhile, will end an era of state control in the oil refining business which started in the early 70s.

The Gokongwei group has already signified its interest to buy the government’s 40-percent stake in Petron.

Teves said that if the government successfully sells Petron, it would be on track with its program to contain the budget deficit at P75 billion for this year.