Aramco to sell 40% holding in Petron - Emirates24|7

Aramco to sell 40% holding in Petron

(AFP)   

   


Aramco Overseas plans to sell its entire 40 per cent stake in the Philippines’ largest oil company Petron to Sea Refinery Holdings, it was announced on Friday.

Petron added that Sea Refinery, owned by the Ashmore Group, has offered $550 million (Dh2.02 billion) for the 3.75 billion shares.

Officials from Aramco Overseas – a Saudi Arabian Oil Company subsidiary – and Ashmore were not available for comment.

State-owned Philippine National Oil Company (PNOC) – Petron’s other major shareholder with a four per cent stake – said it will evaluate Ashmore’s proposal and decide whether to exercise its right of first offer to purchase the shares.

“We have received a notice from Aramco Overseas regarding the proposed sale of its shares in Petron, and will carefully evaluate this filing with the diligence and rigour necessary and appropriate to determine the best course of action,” said PNOC President and Chief Executive Antonio Cailao.
 
The company is not expected to stand in the way of Ashmore’s proposal, given that Philippine President Gloria Macapagal Arroyo on Friday hailed the bid as a “vote of confidence in Petron.”

“I am always heartened when an existing investor increases its presence in the Philippines because there is no better endorsement of our country as an investment location,” she said.

Ashmore also has an investment in Maynilad Water Services – one of two firms that hold a concession from the government to provide water and sewerage services in the capital – and is a buyer of Philippine foreign bonds.

Arroyo expressed appreciation for the investment that Saudi Aramco made in Petron 14 years ago, but admitted that its “business focus has changed since”.

The government privatised Petron in 1994 with PNOC selling a 40 per cent stake to Aramco for $535m. PNOC held the other 40 per cent, while the remaining 20 per cent was sold to the public. At the current foreign exchange rate of PHP41.45 too the US dollar, Ashmore’s offer values Petron at PHP6.08 (Dh0.53) per share, compared to Thursday’s closing price of PHP6.10.

Petron has a market capitalisation of $1.4bn.

Virgina Ruivivar, Petron’s public affairs manager, said Aramco is realigning its investment portfolio with the intention of expanding capacity in Saudi Arabia, and possibly to export products.

Petron Chairman and Chief Executive Nicasio Alcantara said the company is looking forward “to continuing our relationship commercially under Saudi Aramco’s commitment to maintain crude oil supply”.

“Petron’s business remains strong and I am confident that our momentum will continue,” he said.

The company’s net profit rose to PHP6.01bn in 2006. (Reuters)

 

 

The number

 

$550m
The amount being offered by Sea Refinery Holdings for the 3.75 billion Petron shares being sold by Aramco Overseas, a subsidiary of oil giant Saudi Aramco
 
 
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