This article first appeared in The Edge Financial Daily on December 10, 2019

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) said it has successfully completed block trades of its shares in MISC Bhd, Petronas Dagangan Bhd (PetDag) and Petronas Gas Bhd (PetGas), with the shares sold to Malaysian institutional funds.

The national oil major said the trades were carried out as part of its portfolio management strategy and the sale of the shares would also allow for more local participation and ownership in the companies.

“Petronas retains its controlling stake in MISC, Petronas Dagangan and Petronas Gas which will continue to be Petronas’ subsidiaries. We remain committed to these companies which are essential entities in the Petronas integrated business value chain,” it said in a statement yesterday.

While it did not reveal details of the sale of the shares, Bloomberg reported that Petronas raised about RM6 billion from cutting its stakes in the companies and said that the group is raising capital to fund overseas expansion, noting that it intends to allocate a larger share of its future capital expenditure to projects in the Americas.

The group is also facing a suit by the Sarawak government relating to the state sales tax on petroleum products owed by Petronas to the state.

Bloomberg’s data showed that a total of 228.28 million MISC shares were traded off-market yesterday, across six blocks, representing a 5.11% stake in the company. The shares were exchanged at RM7.94 apiece, translating into a total value of RM1.81 billion.

Meanwhile, PetDag saw a total of 59 million shares, representing a 5.94% stake in the company, exchanged via three blocks of shares for RM1.32 billion or RM22.43 per share.

PetGas saw a total of 191.15 million shares or 9.66% traded off-market for a total of RM2.87 billion or RM15.03 per share.

Assuming that these shares were all disposed of by the national oil major (the parties involved in the trades were unknown at the time of writing), Petronas’ stake in MISC, PetDag and PetGas will be reduced to 57.56%, 63.94% and 51% respectively.

Bloomberg noted that the selldowns will rank among the biggest-ever block trades in Malaysia.

In a recent interview with The Edge Malaysia weekly, Petronas president and group chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin was asked about talks of the group possibly reducing its stakes in certain listed companies.

He said that Petronas’ stakes in listed companies are “a currency” for the group.

“We always review our portfolio. If there is ever a need, if the time comes, of course there is a currency that we have with us,” said Wan Zulkiflee.

MISC’s share price fell four sen or 0.48% to RM8.29 yesterday, with a market capitalisation of RM37 billion. PetDag fell 18 sen or 0.81% to RM22.16, valuing the group at RM22.01 billion. PetGas, meanwhile, fell 20 sen or 1.27% to RM15.60, with a market capitalisation of RM30.87 billion.