LISTED independent oil firm Phoenix Petroleum Philippines, Inc. on Monday said that its board of directors had greenlit its divestment from a trading and supply subsidiary via a share buyback arrangement.
In a stock exchange disclosure, the company said its board approved the divestment in PNX Petroleum Singapore Pte. Ltd. on Friday.
“The divestment is consistent with and pursuant to the Liability Management Exercise (LME) in order to generate additional working capital to support core business operations,” the company said.
The company did not disclose additional details on the value of the shares bought back.
Based on Phoenix Petroleum’s information statement, PNX Petroleum was registered in Singapore and started operations sometime in October 2017.
It described the subsidiary as its regional trading arm holding office in Singapore. It said the unit “is able to buy directly from the refineries in the region due to its bigger requirements. It also takes orders and sells to other local and regional buyers.”
In September, Phoenix Petroleum’s board approved the authority for its management to transfer, sell, and dispose of certain corporate properties, assets, and investments.
The move is in line with the company’s financial management program as part of its debt management and funding activities.
As of June, the parent company held an 85% stake in the subsidiary.
In the second quarter, Phoenix Petroleum incurred an attributable net loss of P1.098 billion, reversing its P143.48 million net income in the same quarter last year.
Revenues fell by 63.2% to P14.6 billion from P39.7 billion previously.
In March, Phoenix Petroleum signed a memorandum of understanding (MoU) with Malaysian state oil firm Petronas for a joint exploration of a downstream marketing business and associated technology solutions.
Under the MoU, the two companies will conduct a joint feasibility study on what will be the next phase of the partnership.
Phoenix Petroleum has business interests in the trading of petroleum products, distribution of fuels to retail and industrial customers; marketing and distribution of liquefied petroleum gas, lubricants, and other chemicals, as well as terminaling and hauling services.
It has expanded into retailing its fuel products and complementary nonfuel retail businesses such as convenience store retailing and digital transaction services through its subsidiaries.
At the local bourse on Monday, the company’s shares were unchanged at P6 apiece. — Sheldeen Joy Talavera