Phoenix, other oil firms ‘on the search’ for buyers

Published March 23, 2021, 4:15 PM

by Myrna M. Velasco

With the crashing impact of the pandemic on oil demand as well as on corporate bottom lines, several oil companies in the country are reportedly exploring options to unload shares or divest their assets.

Listed firm Phoenix Petroleum Philippines Inc. of Davao businessman Dennis Uy, in particular, has disclosed to the Philippine Stock Exchange (PSE) the approval given by its board of directors to look out for prospective takers of shareholdings that the company is setting for divestment.

The oil firm said its management has been permitted “to enter into negotiations under reasonable and acceptable terms and conditions advantageous to the Corporation with any third party corporations or any other entity or entities for the possible transfer, sale, mortgage or disposition of certain corporate properties, assets or investments as may be necessary and required.”

It added the divestment plan is “in relation and pursuant to the financial management program exercised by the corporation as part of its debt management and funding activities.”

In an earlier disclosure to the local bourse, the Uy-led oil firm similarly stated that it is “open to consider any investor willing to invest and believes in the operations of the company and can further add value to its business activities.”

According to industry sources, one of the prospective buyers that Phoenix Petroleum has been in talks with is Citadel Holdings Inc. of the Delgado group, a company with foray in the liquefied petroleum gas (LPG) sub-segment of the deregulated downstream oil sector.

Apart from Phoenix Petroleum, another merger and acquisition (M&A) deal in the offing is the planned buyout by Villavicencio-led Filoil Energy Co. of the shareholdings of its partner, French firm Total, in their marketing and logistics joint venture that was cemented in 2016.

There are also industry talks circulating that another Villavicencio-held oil firm TWA Inc. is planning to sell; and one interested buyer is reportedly Liquigaz, a LPG company that is now under the ownership of Fernwood Holdings Inc.

The downstream oil sector had been heavily battered since the incursion of the pandemic last year; and while there had been green shoots of recovery in the fourth quarter, such gains are being eroded by the increasing rate of Covid-19 infections in the country.

To note, oil demand dropped by as much as 60 to 70-percent during the enforcement of strictest lockdowns in the second quarter last year; and that triggered the financial hemorrhage that most, if not all players, had suffered last year.

There had been previous expectations of recovery this year, but the very slow pace of Covid-19 inoculation program compounded by the speedy transmission of infection, has been putting the industry in another pace of shaky prospects. (MMV)