Ashmore-SMC tie-up likely
November 15th, 2008 | by mantrionline |UK invesTment manager Ashmore Group is looking for a strategic partner in running oil refiner Petron Corp. and sees food and beverage giant San Miguel Corp. as a company that will bring value into the oil refiner, an Ashmore Philippine representative said yesterday.
Petron president Eric Recto, who represents Ashmore in the Petron board, told reporters that Ashmore was considering San Miguel as a possible partner and saw synergy between the oil refiner and the food company once a proposed partnership is forged.
“Ashmore is the kind of investor that will allow value to be brought by the right partner. If they do conclude a transaction, Ashmore believes San Miguel will bring a lot of value into Petron,” Recto said.
Recto said Ashmore had planned to bring in a partner in Petron when the London-listed fund manager acquired 40 percent of Petron’s shares from Saudi Aramco.
“They [Ashmore people] are spending time with San Miguel. So they must be considering San Miguel,” Recto said.
He said, however, that San Miguel was not the only company that Ashmore was in talks with, adding that several foreign firms had also expressed interest in Petron.
San Miguel earlier confirmed that it was in talks with the Ashmore Group for a possible acquisition of a majority interest in Petron. San Miguel is diversifying from its food and beverage core businesses to improve its revenues.
Ashmore said it planned to exercise its right of first refusal over the 40 percent stake set to be sold by the state-owned Philippine National Oil Co.
Ashmore owns slightly over 50 percent of Petron Corp. and has the right of first refusal over the government stake. The government hopes to raise roughly P25 billion from sale of its shares in Petron.
The Energy Department, meanwhile, awarded a coal operating contract to state-owned PNOC Exploration Corp. and Agusan Petroleum and Mineral Corp. to jointly explore Siay, Zamboanga Sibugay. Agusan Petroleum, according to the department, is a newly formed subsidiary of San Miguel.
“This initiative is, of course, going to help the country become more energy self-sufficient,” Energy Secretary Angelo Reyes said in a statement.
The department awarded the contract to PNOC Exploration and Agusan Petroleum to explore for coal in a 6,000-hectare area in Zamboanga Sibugay for a period of four years.
The two companies committed to invest an initial P150 million for coal exploration.
The contract area is estimated to contain coal reserves of 45 million metric tons. Coal is the largest source of fuel for power generation worldwide and the biggest source of carbon dioxide emissions.
