MANILA, Philippines — Davao-based businessman Dennis Uy’s Phoenix Petroleum Philippines Inc. has divested from its Singapore-based trading arm to raise capital to support its core business.
In a disclosure to the Philippine Stock Exchange, Phoenix said its board of directors approved the divestment in PNX Petroleum Singapore Pte. Ltd. via a share buyback by the latter.
“The divestment is consistent with and pursuant to the Liability Management Exercise (LME) in order to generate additional working capital to support core business operations,” the company said.
In a text message to reporters, Phoenix senior vice president for external affairs Raymond Zorrilla said the divestment was equivalent to 85 percent of its stake in the Singapore unit, which would be settled in cash.
He did not provide details on the value of the transaction, but shared that the funds would be “used to shore up (Phoenix’s) working capital needs, particularly to purchase inventory for its B2B customers.”
Established in 2017, PNX Petroleum Singapore Ltd. Pte. was envisioned to enhance the petroleum importation efficiencies of the group and to provide access to fast growing markets in Southeast Asia.
The company leveraged on its Singapore trading platform to boost its operations following a hefty drop in earnings in 2019.
That year, it invested $12.6 million in its Singapore trading platform to grow its trading business to purchase inventory for trading.
Moreover, the company earlier said the Singapore unit serves as a springboard for its regional expansion.
As of end-June, Phoenix has a total of 598 operating retail service stations.
In the first half, the company’s losses widened to P2.07 billion from P62.11 million in the same period last year as lower volume sold during the period slashed revenues by more than half.