San Miguel takes control of Petron

San Miguel Corp. (SMC), the largest food and beverage company in Southeast Asia, has taken over control of Petron Corp. following a shakeup in the board of the biggest oil firm in the Philippines.

In a disclosure to the Philippine Stock Exchange yesterday, Petron corporate secretary Luis Maglaya said three SMC officials – led by chairman and CEO Eduardo Cojuangco Jr. – and an independent director gained seats in Petron’s 10-man board during a special board meeting Thursday.

Aside from Cojuangco, the other SMC executives include its president and COO Ramon Ang – who was elected as the new chairman of Petron – and SMC counsel Estelito Mendoza.

Ang took the chairmanship from Nicasio Alcantara who, however, remains a director in Petron’s board.

Petron president Eric Recto, meanwhile, will likewise hold on to his post as president.

Completing the new entrants in Petron’s board is independent director Angelico Salud.

Besides Alcantara and Recto, the other holdovers in Petron’s board consist of Bernardino Abes, former Trade Minister Roberto Ongpin, former Budget Secretary Emilia Boncodin and Ron Haddock.

Maglaya also disclosed that along with the board overhaul, two new managerial positions in Petron were also created. Emmanuel Eraña will now sit as the company’s chief finance officer and Lubin Nepomuceno as general manager.

According to Petron insiders, there are still no major movements in the rest of management from the vice president level while SMC sources, on the other hand, confirmed there would be a “status quo” in Petron’s rank-and-file.

 Meanwhile, SMC has committed to pay the Ashmore Group $10 million to retain an exclusive option to buy the British investment firm’s 50.1 percent stake in Petron, Ang said.

The new Petron chairman said the $10 million covers the cost of the option agreement, and will be deducted from the cost of acquiring the Petron shares if the deal goes through.

“If you exercise (the option), it ($10 million) forms part of the payment, if you don’t, you lose it,” Ang said in a mobile phone text message to Reuters.

SMC said it has two years from Dec. 24, 2008, to exercise the option to buy the Petron stake.

It had signed the option agreement with SEA Refinery, a wholly-owned subsidiary of London-listed investment manager Ashmore, to buy a unit that owns 50.1 percent of Petron.

Ashmore owns a total of 90.57 percent of Petron after buying the government’s 40 percent interest for around $544 million last month.

SMC, partly owned by Japanese brewer Kirin Holdings, is cash rich after selling major beverage businesses in recent years.

The deal with Ashmore is the third foray for SMC out of its core food and drinks businesses — a move aimed at fuelling growth.

Last month, SMC signed a deal with Qatar Telecom to offer wireless broadband and mobile services in the Philippines.

That followed its purchase of a 27 percent stake in power retailer Manila Electric Co. for about $607 million in late October.