RP may still sell stake in Petron to help poor


Posted at Jun 17 2008 07:37 PM | Updated as of Jun 18 2008 03:37 AM

Agence France-Presse

The Philippine government is considering selling its remaining 40 percent stake in oil refiner Petron to raise money to help the poor, Finance Secretary Margarito Teves said Tuesday.

"We hope to raise P30 billion ($678 million) from privatization this year," Teves said in a statement.

He said Petron, the country's largest oil refiner, and PNOC-EC, the oil exploration arm of the government's Philippine National Oil Company (PNOC), had not been part of the state assets planned to be privatized.

"However we are looking at the possibility of selling these assets should we need more resources to help the poor cope with rising oil and food prices," Teves said.

The government has been offering subsidies to help the poor in the payment of electrical bills and fuel. However critics say this system will have only minimal benefits for the neediest.

Sell at a premium

Earlier this week, Energy Secretary Angelo Reyes said Manila had turned down the London-based Ashmore Group's tender for the government's Petron stake, saying the government could sell its shares at a premium.

Ashmore bought 40 percent of Petron from Saudi Aramco in May this year for $550 million and tendered for the remaining 60 percent offering about $827.23 million.

Of the 60 percent, small investors hold just 20 percent.

Under Philippine law, a company owning more than 30 percent has to make a general offer for the remainder of the shares.

If Ashmore had won the government's stake, it is highly unlikely that it would have been allowed to take over the company. Philippine law only allows foreigners 49 percent ownership.

Petron has 9.375 billion outstanding shares and a market capitalisation of P55.3 billion.

Saudi Aramco bought its stake in 1994 for $535 million .