Phoenix Petroleum Philippines Inc. said it had sold two subsidiaries to separate affiliates for a total of P3 billion, which would be used for debt servicing.
“The sale will allow Phoenix to allocate all of its resources to fuel and thus, drive the growth of its core business (distribution of petroleum products nationwide),” the company told the Philippine Stock Exchange.
Phoenix added that proceeds from the sale would be used to pay existing debts, which would save the company up to P160 million yearly in interest expense starting 2017.
Disposed of last Nov. 24 was Chelsea Shipping Corp. (CSC), which is engaged in the maritime transportation of petroleum and other petroleum based products and fuels for industrial, marine, aviation and automotive use, whether wholesale or retail.
CSC was sold to Chelsea Shipping Group Corp. which paid P1.5 billion in cash up front, with the remaining P500 million to be paid also in cash within six months.
“Since the core business of CSC is different and independent from the core business of Phoenix, there is no material effect in terms of business and operation of Phoenix,” the company said.
“Moreover, the proceeds will enable the company to pay off its existing interest bearing debts and thus improve its financial statements,” Phoenix added.
Also, Phoenix Petroterminals and Industrial Park Corp. (PPIPC) was sold to real estate developer Udenna Development Corp. or Udevco.
PPIPC manages the 94-hectare Phoenix Petroterminals and Industrial Park in Calaca, Batangas. It is engaged in the business of acquiring and selling lands, buildings and improvements.
Udevco paid P950 million in cash while the balance of P50 million shall be paid within six months.
Last Wednesday, Phoenix said its full-year net income jumped 21 percent to a record P1.09 billion in 2016, mainly on a similarly all-time high turnover.
The volume of fuel sales revved up by a quarter to hit 1.5 billion liters while lubricant sales cranked up by 18 percent as the company said its market share increased.
“Based on the latest data released by the Department of Energy, Phoenix Petroleum registered a market share of 6.9 percent as of the first half of 2016, putting it on track to becoming the third largest oil company in the country by the end of 2017,” the company said in a statement.