Friday, Mar 14, 2008


 
   (Adds comments from Philippine president, details)

MANILA (Dow Jones)--Petron Corp. (PCOR.PH) - the Philippines' largest oil company by assets - Friday said major shareholder Aramco Overseas Co. plans to sell its entire 40% stake to SEA Refinery Holdings.

It added that SEA Refinery, which is owned by the Ashmore Group PLC (ASHM.LN), has offered $550 million for the 3.75 billion Petron shares.

Officials from Aramco Overseas - a Saudi Arabian Oil Co. subsidiary - and Ashmore weren't immediately reachable for comment.

State-owned Philippine National Oil Co. - Petron's other major shareholder with a 40% stake - said it will evaluate Ashmore's proposal and decide whether to exercise its right of first offer to purchase the shares.

"We have received a notice from Aramco Overseas regarding the proposed sale of its shares in Petron, and will carefully evaluate this filing with the diligence and rigor necessary and appropriate to determine the best course of action," said PNOC President and Chief Executive Antonio Cailao.

The company is unlikely to stand in the way of Ashmore's proposal, given that Philippine President Gloria Macapagal Arroyo Friday hailed the bid as a "vote of confidence in Petron."

"I am always heartened when an existing investor increases its presence in the Philippines because there is no better endorsement of our country as an investment location," Arroyo said in a statement.

Ashmore has an investment also in Maynilad Water Services Inc. - one of two companies which hold a concession from the government to provide water and sewerage services in the capital - and is a buyer of Philippine foreign bonds.

Arroyo expressed appreciation for the investment that Saudi Aramco made in Petron 14 years ago, but acknowledged that its "business focus has changed since."

The government privatized Petron in 1994 with PNOC selling a 40% stake to Aramco Overseas for $535 million.

PNOC held the other 40%, while the remaining 20% was sold to the public.

At the current foreign exchange rate of PHP41.45 to the U.S. dollar, Ashmore's offer values Petron at PHP6.08 per share, compared to Thursday's closing price of PHP6.10.

Petron has a market capitalization of $1.4 billion.

Virgina Ruivivar, Petron's public affairs manager, told Dow Jones Newswires that Aramco is realigning its investment portfolio with the intention of expanding capacity in Saudi Arabia, and possibly to export products.

Petron Chairman and Chief Executive Nicasio Alcantara said the company is looking forward "to continuing our relationship commercially under Saudi Aramco's commitment to maintain crude oil supply."

"Petron's business remains strong and I am confident that our momentum will continue," Alcantara said.

The company's net profit has more than doubled in the past few years, rising to PHP6.01 billion in 2006 from PHP2.92 billion in 2002.

-By Cecilia E. Yap and Cris Larano, Dow Jones Newswires; (632) 848-5051; cecilia.yapdowjones.com

(END) Dow Jones Newswires

14-03-08 0556GMT