San Miguel to pay $10M for Petron stake option
Reuters | 01/09/2009 12:29 PM
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San Miguel Corp. has committed to pay Ashmore Group $10 million to retain an exclusive option to buy the British investment firm's 50.1 percent stake in Philippine oil refiner Petron Corp., its president said on Friday.
Ramon Ang said the $10 million covers the cost of the option agreement, and will be deducted from the cost of acquiring the Petron shares if the deal goes through. (Read background here.)
"If you exercise (the option), it ($10 million) forms part of the payment, if you don't, you lose it," Ang said in a mobile phone text message to Reuters.
The Manila-based firm has said it has two years from Dec. 24, 2008, to exercise the option to buy the Petron stake.
It had signed the option agreement with SEA Refinery, a wholly-owned subsidiary of London-listed investment manager Ashmore, to buy a unit that owns 50.1 percent of Petron.
Ashmore owns a total of 90.57 percent of Petron after buying the government's 40 percent interest for around $544 million last month.
San Miguel, partly owned by Japanese brewer Kirin Holdings, is cash rich after selling major beverage businesses in recent years.
The deal with Ashmore, if exercised, would be the third foray for San Miguel out of its core food and drinks businesses -- a move aimed at fuelling growth.
Last month, San Miguel signed a deal with Qatar Telecom to offer wireless broadband and mobile services in the Philippines.
That followed its purchase of a 27 percent stake in power retailer Manila Electric Co. for about $607 million in late October.
