Phoenix buys 2 firms for P6.26 billion

PHOENIX Petroleum Philippines, Inc. on Thursday said it secured board approval for the plan to buy liquefied petroleum gas (LPG) seller Petronas Energy Philippines, Inc. (PEPI) and Duta, Inc. for $126.1 million (P6.26 billion).

In a disclosure to the stock exchange, Phoenix Petroleum said its board of directors on Wednesday approved the acquisition of 100% shares owned by PDB (Netherlands) B.V. in PEPI and Duta.

PDB or Petronas Dagangan Berhad is the principal marketing unit of Malaysia’s national oil company Petroliam Nasional Berhad.

Phoenix Petroleum said it will make the $126.1 million payment for both companies in cash.

Of the total, $24 million will be paid within three business days after the execution of the share purchase agreements. The remaining $96 million will be paid in full after completion of the deal and approval by the Philippine Competition Commission (PCC).

Phoenix Petroleum will also pay $6.1 million for the acquisition of DUTA in cash.

Merger and acquisition deals in the Philippines valued at least P1 billion are subject to PCC review.

“The Company views the LPG business as a strong strategic fit as it broadens its product portfolio and petroleum presence across the country, with cross selling opportunities in fuel and LPG to consumers and corporates,” Phoenix Petroleum said.

PEPI is primarily 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 alternative fuel for vehicles.

Duta, on the other hand, manages and holds the various land parcels used by PEPI’s businesses.

Dennis A. Uy, Phoenix Petroleum president and CEO, earlier said the company was planning to spend between P6 billion and P8 billion in the next three year on top of the P2 billion it had set aside for 2017.

In 2016, Phoenix Petroleum posted a net income of P1.09 billion, higher by 21% compared with the earlier year’s bottom line, driven by fuel sales that expanded by double digits after “solid” growth in volume.