- Mergers & Acquisitions
PETRONAS Lubricants to buy Thai marketing operations from PDB
PETRONAS Lubricants International Sdn Bhd (PLISB) is acquiring PETRONAS Dagangan Bhd’s 100% equity interest in PETRONAS International Marketing (Thailand) Co Ltd (PIMTCL) for THB105.73 million (USD3.18 million).
PETRONAS Dagangan acquired PIMTCL in 2012 for USD12.58 million. PIMTCL’s principal activities are marketing and distributing lubricants products in Thailand under PETRONAS’ brands such as Sprinta, Syntium and Urania, manufactured by toll blenders in Thailand.
Based on the latest audited financial statement, PETRONAS International Marketing (Thailand) has net assets of RM14.3 million (USD3.45 million) and net profits of RM0.8 million (USD0.19 million) as of December 31, 2020. PDB expects to book a loss of USD6.4 million from this divestment.
In a filing with Bursa Malaysia last week, Petronas Dagangan said its indirectly wholly-owned subsidiary in Thailand will cease to be a subsidiary upon the completion of the divestment.
The divestment is a “related-party transaction” as PETRONAS is the major shareholder of both PETRONAS Dagangan and PETRONAS Lubricants International.
PETRONAS Lubricants International, a wholly owned subsidiary of the national oil corporation of Malaysia, is the global lubricants manufacturing and marketing arm of Petroliam Nasional Berhad (PETRONAS). Established in 2008, PETRONAS Lubricants International manufactures and markets a full range of high-quality automotive and industrial lubricants products in over 100 markets globally.
PETRONAS Dagangan Bhd or PDB is the principal marketing arm of PETRONAS. Incorporated in Malaysia in 1982 and listed on the Main Board of Bursa Malaysia on 8 March 1994, PDB has since established itself as Malaysia’s leading retailer and marketer of downstream oil and gas products.
Rationalising non-core business
“The divestment is part of PDB’s portfolio high-grading exercise to rationalise non-core business,” the company said in its filing with Bursa Malaysia.
“More importantly, this divestment will enable PDB to focus resources into areas that will create and enhance the highest value to its shareholders,” it said.
PIMTCL had faced severe competition since 2012, and has been unable to make a significant contribution to its parent’s profitability, according to PETRONAS Dagangan. It added that all the expected gross cash estimated proceeds of RM14.2 million (USD3.42 million) will be utilised for its day-to-day operational expenditure.