Phoenix Petroleum mulls sale of 20% stake

MANILA, Philippines - Listed oil firm Phoenix Petroleum Philippines Inc. is mulling the possibility of selling 20 percent of its stake to strategic foreign and local investors to fund its capital requirements.

Dennis Uy, Phoenix president and chief executive officer, said there have been ongoing discussions on the comtemplated sale of its equity.

Proceeds from the sale, Uy said, would be used to finance the company’s aggressive expansion program.

According to Uy, the proposed sale of another 20-percent stake in the company would be on top of the subscription agreement with state-owned Social Security System (SSS).

The government pension fund is eyeing up to 10 percent of Phoenix’s shares.

At present, some 27 percent of Phoenix is listed at the Philippine Stock Excange (PSE).

Uy also disclosed the possibility of Phoenix merging with other bigger oil companies.

Earlier, Uy said they would allot some P500 million for its capital expenditure for 2010.

The bulk of the budget or P200 million, Uy said, would go to expansion of their network.

The company is planning to put up at least 40 to 50 retail stations all over the country. At present, Phoenix operates about 97 stations in Mindanao alone.

The remaining budget, he added, would fund its planned construction of oil depots.

Uy estimated that the company would spend about P3 million to P8 million each station.

Uy said their expansion network will aggressively be focused in the Luzon and Mindanao areas.

The Phoenix Petroleum chief said they would be sourcing most of its budget from debts and internally-generated funds.

“We may tap the debt markets. It’s a combination of debt and internal funds,” he said.

Uy said they hope to tap other markets in Luzon thus, aggressively looking for sites in Luzon particularly in Metro Manila. It has stations in Marikina and Fort Bonifacio.

“We hope motorists will continue to patronize our brand,” Uy said, noting that Phoenix started with only 20 stations when it listed its shares at the Philippine Stock Exchange in 2007.

This year, he said they expect to complete 22 stations which will bring its total stations to 120 by the end of the year.

“We want most of our stations to be dealer-owned and dealer-operated compared to company-owned and dealer-operated because the rollout is faster,” he said.

Phoenix Petroleum is engaged in the business of trading refined petroleum products, lubricants, chemicals and an array of car care products and accessories.

It also provides services such as depot operation, depot storage, logistics, into-plane and allied services.