RP to sell Petron stake for P26 B

The government still intends to sell its 40-percent stake in Petron Corp., the company said in a statement yesterday.

The stake is held by state-run Philippine National Oil Co. (PNOC) and will be offered to London-based Ashmore Group which has the right of first refusal over the shares and currently owns slightly over 50 percent of Petron.

The PNOC stake in Petron is equivalent to 40 percent or 3.75 billion shares of the oil company. It is selling its stake for P6.85 per share and the Ashmore Group has 60 days to exercise its right of first refusal. The sale is roughly worth P26 billion.

The sale of PNOC’s stake in Petron is part of government efforts to improve its fiscal position and raise funds for essential infrastructure and social programs. It is also in line with the government’s policy to privatize state-owned assets.

Finance Secretary Gary Teves announced in Malacañang last week that government was looking to earn as much as P40 billion from the sale of its shares in Petron.

“We are hopeful for a good price in Petron aside from new revenues from sin taxes and revised fiscal incentives,” Teves said.

Meanwhile, Petron chairman and chief executive officer Nicasio I. Alcantara said that the prospective change of ownership would not affect its strong fundamentals.

“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,” Alcan-tara said.

Last July, SEA Refinery Holdings BV, a company owned by the Ashmore Group, completed the acquisition of Aramco’s 40 percent stake in Petron for $550 million.

It also acquired an additional 10.57 percent of Petron shares following a mandatory tender offer.

Alcantara said that the entry of Ashmore and the possible acquisition of the remaining number of shares is “an endorsement of our diversification strategy and the Philippines as an investment location.”

Petron has diversified into the production of petrochemical feedstock and expansion of its non-fuel business.