KUALA LUMPUR (May 24): Petronas Dagangan Bhd (PetDag), the principal marketing arm of Petroliam Nasional Bhd, has found a buyer for its business in the Philippines, which will mark its exit from liquefied petroleum gas (LPG) business.

PetDag announced today that its wholly-owned unit, PDB (Netherlands) BV (PDBN), has inked a Memorandum of Understanding (MoU) with Phoenix Petroleum Philippines Inc to divest of its entire equity interest in Petronas Energy Philippines Inc, along with its remaining 40% stake in Duta Inc.

The remainder 60% stake in Duta Inc, held by Alsons Consolidated Resources Inc and Masaligan Inc, will also be divested by PDBN, who is also representing both Alsons and Masaligan in the deal, PetDag said in a Bursa Malaysia filing.

“Our exit from the LPG business in the Philippines is part of the company’s portfolio review exercise,” PetDag chairman Md Arif Mahmood said in the statement.

PEPI was incorporated in 1995 and undertakes LPG marketing in the Philippines, while Duta Inc is a land holding company.

President and chief executive of Phoenix, Dennis A Uy, said: "We have been actively looking to expand our business portfolio in recent years, particularly in the LPG space, as part of our goal of becoming one of the leading oil and gas players in the Philippines. This acquisition helps us achieve just that.” 

He added PEPI has strong presence in Visayas and Mindanao — regions that Phoenix is very familiar and experienced in serving, given its own roots. Hence the buy will put Phoenix in a good stead to grow the business further.

A formal share purchase agreement will be executed by PHEONIX and PDBN, after the Philippine Competition Commission (PCC) formally accepts the required documents to notify the PCC of the exercise, it added.

The MoU is in contrast to a previous statement by PetDag chairman Md Arif Mahmood in April that the retailer was only looking to sell its Vietnamese subsidiaries, while en route to improve its operations in the Philippines.

PetDag acquired the downstream companies in Philippines back in 2012 as part of its regional expansion strategy, alongside other similar acquisitions in Thailand and Vietnam during the same period.

It has disposed of part of its Vietnam venture in 2015, and is now in the midst of looking for a new buyer for another Vietnam subsidiary, Thang Long LPG Co Ltd, after the previous interested buyer, Totalgaz Vietnam Ltd, pulled out of the deal.

At 5pm, shares of PetDag closed 30 sen or 1.22% lower at RM24.38, giving it a market capitalisation of RM24.22 million.