Phoenix acquires cargo shipping firm

MANILA, Philippines - Davao-based Phoenix Petroleum Philippines Inc. is acquiring a shipping firm to ensure efficient supply of oil for its gasoline distribution business.

The oil firm also secured board approval for its plan to raise as much as P500 million through the issuance of convertible notes.

In a disclosure, Phoenix Petroleum said its board of directors approved the plan to acquire 100 percent of Davao-based Chelsea Shipping Corp. through a P1.4-billion share-swap deal.

Phoenix Petroleum said the acquisition will “ensure control of product supply and minimize and eliminate potential risk of supply disruptions due to scarcity of tanker vessels.”

“The strategic acquisition of Chelsea is consistent with our goals of sustaining our competitiveness in the industry and fostering the long term success of our company,” said Phoenix Petroleum president and chief executive Dennis Uy.

Under the deal, Phoenix Petroleum will issue 171.25 million common shares from its authorized but unissued capital at P8.2931 per share to Chelsea.

The transaction is valued at P1.42 billion.

Chelsea is 100-percent owned by Udenna Management & Resources Corp., which held 16.562 million shares or a 3.38-percent stake in Phoenix Petroleum as of end-March.

The shipping firm has 10 vessels in its fleet, two of which serve the regional trade route of Taiwan to the Philippines.

“With 19,561 gross registered tonnage, Chelsea is among the top five major tanker owners in the country,” Phoenix Petroleum said.

Meanwhile, the company plans to raise fresh capital through convertible notes.

Phoenix Petroleum will issue P500 million worth of convertible corporate notes. The plan also includes a P180-million warrant offering with BDO Unibank.