San Miguel confirms review of Petron buy-in option
Reuters | 11/04/2009 6:26 PM
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MANILA - Conglomerate San Miguel Corp said on Wednesday it may ditch its plan to buy a majority stake in Philippines' largest oil refiner Petron Corp, after the government imposed a cap on oil prices.
San Miguel paid $10 million to gain an exclusive option to buy a 50.1% stake in Petron from Britain's Ashmore Group. It has until Dec. 2010 to take up that option.
"The company is evaluating the viability of exercising the option to acquire a 50.1% stake in Petron Corp in the light of the restrictions imposed on petroleum firms," Ferdinand Constantino, San Miguel corporate information officer said in a disclosure.
Petron said last week it expects to incur a net loss of P1.5 billion ($31 million) in the fourth quarter partly due to a government order for oil companies in the Philippines to cut oil prices to Oct. 15 levels after typhoons ravaged the country killing more than 900 people in recent weeks.
The presidential order, issued on on Oct. 23, was meant to alleviate the impact of high oil costs on Filipinos after the typhoons caused massive damages on property and crops.
The country's business sector has asked the presidential palace to lift the price cap, saying the move may deter investors.
Petron had a net income of P1.81 billion in the first half, down 22% from a year ago.
The oil refiner is expected to post a net income of P4 billion this year, a reversal of last year's net loss of nearly P4 billion, according to Thomson Reuters.
On Tuesday, San Miguel said it was eyeing more investments in the power sector and may bid at a government auction for the right to acquire the output of three hydropower plants.
It is looking to grab a contract to manage the output of the 345-MW plant in San Roque, Pangasinan, a 70-MW facility in Ilocos Sur province and a 30-MW plant in Benguet, all in northern Philippines.
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