Phoenix Petroleum Philippines Inc. said Wednesday its board granted an authority to the management to negotiate with third parties on the possible sale of assets to raise funds and reduce debt.
Phoenix said in a disclosure to the stock exchange its board approved on March 22 “the authority for management to enter into negotiations… with any third party corporation… for the possible transfer, sale… or disposition of certain corporate properties, assets or investments… as part of its debt management and funding activities.”
The authority will be submitted for stockholders’ approval during the annual meeting on April 30.
Phoenix senior vice president for external affairs Raymond Zorrilla said the approval was part of the company’s strategy in its finance management program.
Phoenix earlier said it was open to investors willing to invest and who could add value to its operations, finances and value of stocks.
The company posted a net loss of P95 million in the first nine months of 2020 from a net income of P918.3 million in the same period in 2019 amid the coronavirus pandemic that resulted in a significant decline in fuel demand and low oil prices.
Gross revenues plunged to P56.77 billion in the nine-month period from P73.2 billion a year earlier.
The company expressed hope for a positive 2020 earnings on cost saving measures implemented in the past several months.
Latest data from the Department of Energy showed that Phoenix was the third largest oil firm in the country as of end-June 2020.
Phoenix is led by businessman Dennis Uy who recently sold his stake in 2GO Group Inc. to SM Investments Corp.
Analysts said the planned asset sale by Phoenix and the recent move of Uy’s Chelsea Logistics and Infrastructure Holdings Corp. to sell its stake in 2GO Group were part of the strategy to focus on new businesses with huge growth potential.
“Yes, it is definitely a good strategy to divest his core businesses which he has been able to maximze in favor of new business like telco which have enormous potential,” said Chris Mangun, research head of AAA Equities said.
Uy’s Dito Telecommunity Corp. recently started commercial operations in the country, challenging PLDT Inc. and Globe Telecom.
First Grade Finance managing director Astro del Castillo said Uy’s new businesses needed more capital. Castillo said that as Uy has a basket of investments he could dispose of, he could choose businesses that could offer better returns in the future.
Del Castillo said the recent sale of assets may not be last for Uy as the country continued to reel from the effects of the pandemic. With Jenniffer B. Austria