Phoenix Petroleum completes acquisition of ship firm
Publicly listed Phoenix Petroleum Philippines Inc. has finally completed the acquisition of Chelsea Shipping Corp. after concluding a share-for-share swap agreement with the shareholders of the shipping company.
Under the agreement, Phoenix Petroleum acquired 6.3 million common shares, or 100 percent of the outstanding capital stock, of Chelsea Shipping, in exchange for 171 million common shares of Phoenix Petroleum.
In effect, Phoenix Petroleum issued 30 shares for every piece of Chelsea’s, the oil company said in a disclosure to the Philippine Stock Exchange yesterday.
Both parties did not disclose the total purchase price, but earlier disclosures placed the value of the 171 million shares issued by Phoenix Petroleum at about P1.4 billion.
Phoenix Petroleum earlier explained that 90 percent of the quoted purchase price would be paid to the shareholders of Chelsea Shipping through the issuance of 171 million new common shares from the oil company’s unissued authorized capital stock.
The 10-percent balance, meanwhile, would be paid for in cash.
Prior to the share swap agreement, Chelsea was owned by Udenna Management and Resources Corp. (UMRC), which is an existing stockholder of Phoenix Petroleum.
Phoenix Petroleum had said that, as a petroleum company, the ownership of a marine petroleum transport company would be strategic.
The acquisition of Chelsea would ensure the control of product supply by a fleet of vessels ready to transport its products to minimize and eliminate the potential risk of supply disruptions due to scarcity of tanker vessels.
Scheduling of importation of products and distribution in the Philippines could also be facilitated easily, Phoenix Petroleum earlier explained.
The acquisition would likewise protect the oil firm from freight rate fluctuations with the volatile bunker market.
Any reduction in fuel market price will improve the logistics cost, the company said.
It should be noted that Phoenix Petroleum imports about 90 percent of its petroleum products from nearby countries such as Taiwan, China and Singapore.
Chelsea Shipping was incorporated on July 17, 2006, and has 10 vessels in its fleet, two of which serve the regional trade route (Taiwan to Philippines).
It owns the largest Philippine-registered oil tanker M/T Chelsea Thelma.
It is also among the top five major tanker owners in the country.
Apart from Phoenix Petroleum, Chelsea Shipping also provides services to Cebu Pacific Air Inc., PTT Philippines Inc., Total Bulk Corp. (which services Philippine Airlines and Air Philippines), Batangas Bay Carriers Inc. and Marine Fuels Philippines Inc. of the Magsaysay Group of Companies.
In the first half of the year, Phoenix Pertroleum posted a 33-percent decline in its net income to P206 million.
For this year, the oil company is embarking on its most aggressive network expansion program to open a total of 100 additional stations.
As of end-June this year, the company had a network of 255 retail stations.
