Phoenix asset sale seen to boost investor confidence, bring higher returns


PHOENIX Petroleum Philippines, Inc. said on Monday that its planned transfer or sale of assets, if given the go-signal, may improve investor confidence and bring increased returns on invested capital.

In its information statement submitted to the local bourse on Monday, Phoenix Petroleum said the entry of a credible strategic partner could boost confidence in the company.

This may “set the stage for future capital raising activities both in debt and equity markets,” it said.

Details of the proposed asset sale or transfer come around three weeks after it announced that its board had greenlit the move to support its debt management activities. The proposal will be submitted to shareholders for approval during the company’s annual stockholders’ meeting on April 30.

“[Other implications of the proposed actions include] increased returns on invested capital due to enhanced utilization of the assets via sale or transfer; potential gains to the overall bottomline, [and] enhanced credit risk profile and lower borrowing costs… as transaction proceeds are used to pay down debt,” the company said.

At present, the company has not taken up any transaction involving mergers, consolidations, acquisitions and similar matters.

Last month, Phoenix Petroleum’s Senior Vice-President of External Affairs, Business Development and Security Alan Raymond T. Zorrilla said that the firm was exploring how it could maximize the value of assets outside its core business.

The Dennis A. Uy-led listed oil firm previously clarified that like any business, the company or any of its units are “open to consider any investor willing to invest and believes in the operations [of Phoenix Petroleum] and can further add value to its business activities.”

It earlier said that local volume sales slid by 20% in 2020, with fourth-quarter sales cushioning the fall. It closed the year with a P63-million net income, with sales from October to December hitting P158 million, reversing prior losses.

Shares of Phoenix Petroleum in the local bourse shed 0.16% or two centavos to close at P12.28 apiece on Monday. — Angelica Y. Yang