Phoenix Petroleum Philippines, Inc. (PNX) has approved the sale of its shipping and industrial park businesses to its parent company Udenna Group.
The assets which will be divested from its petroleum business include Chelsea Shipping Corporation and Phoenix Petroterminals and Industrial Park Corporation, which have an estimated value of PHP 3 billion and 3.5 billion (USD 64.9-74.5 million) net of debt.
Phoenix Petroleum said the sale process “will be subject to a third party valuation and fairness opinion.”
The sale is expected to generate PHP 500 million to PHP 700 million (USD 10.6-14.9 million) in non-recurring gain for the listed oil company.
“Both companies represent about 8.0 percent of the consolidated assets of PNX as of the end of 2015, and has [an] estimated market value of about PHP 7.0 billion,” Phoenix Petroleum said.
Phoenix Petroleum Philippines said the proceeds from the sale will pay off existing debts. Phoenix Petroleum said the sale will reduce the company’s interest expenses for its outstanding debt by PHP 150 million (USD 3.2 million) to PHP 160 million (USD 3.4 million) starting next year.
“The sale will significantly allow PNX to allocate all of its resources to fuel its aggressive growth in its core business and the distribution of petroleum products nationwide,” the company said.
Phoenix Petroleum is the fastest-growing independent oil company in the Philippines, with 489 fuel retail outlets currently.