Davao—(PHStocks)—Phoenix Petroleum Philippines, Inc. (PSE: PNX) plans to acquire the Liquefied Petroleum Gas (LPG) business of PETRONAS Dagangan Berhad (PDB) in the Philippines. PDB is a Malaysian oil & gas company listed on the Bursa Malaysia.
In its disclosure to the Philippine Stock Exchange, a Memorandum of Understanding was entered on 24 May 2017 between the Company and PDB (Netherlands) B.V.—a wholly-owned subsidiary of PDB—in relation to the planned 100% share acquisition of PETRONAS Energy Philippines Inc. (PEPI) and its affiliate, Duta Inc. The acquisition will be subject to the approval of the Philippine Competition Commission.
Operating in the Philippines for over 20 years, PEPI is engaged in the business of selling LPG in cylinders for household and commercial use as well as LPG in bulk for industrial use and autogas, an environmentally-friendly alternative fuel for vehicles.
Dennis Uy, President and CEO of Phoenix, said, “We are very excited about this asset not only because it represents a new product that Phoenix can offer but also because we know that it has been operated in line with the operating standard of PETRONAS, a Fortune 500 company. PEPI’s level of excellence, professionalism and adherence to the highest of global standards is impressive.”
The potential acquisition of the LPG business is consistent with Phoenix’s goal of becoming one of the leading oil & gas players in the Philippines. With the foray into the LPG space, Phoenix aims to build significant presence in the non-fuel petroleum markets which currently account for about 1% of the company’s business. PEPI generates most of its sales in Visayas and Mindanao – underpenetrated regions, with increasing disposable incomes, and attractive demand prospects. This will allow Phoenix to further grow this business in its home market, where there is room for profitable industry expansion and less competition (versus Luzon). The Company views the LPG business as a strong strategic fit as it broadens its product portfolio and petroleum presence with a particular emphasis in Visayas and Mindanao.
Phoenix Petroleum is the leading independent oil company in the Philippines, engaged in the trading and marketing of refined petroleum products and lubricants, operation of oil depots and storage facilities, hauling and into-plane services.