Asia/Pacific News
Pheonix Petroleum To Acquire Chelsea Shipping Corporation
Pheonix Petroleum Phillippines, Inc. has announced a plan to acquire 100% of Chelsea Shipping Corporation (Chelsea Shipping) in an attempt to control product supply and minimise potential supply disruptions.
Davao-based Phoenix Petroleum has disclosed that 90% of the purchase price, based on the 30-day Volume Weight Average Price (VWAP) from May 24 to July 5, 2012 will be paid via share swap and the remaining 10% will be via cash agreement.
Under the agreement, the oil company will issue 171,250,799 common shares valued at approximately P1.42 billion (US $33.9 million).
The proposal has already been approved by the Board of Directors and will be submitted for the shareholder approval in September.
According to the company's President and CEO Dennis Uy, "The strategic acquisition of Chelsea Shipping is consistent with our goals of sustaining our competitiveness in the industry and fostering the long term success of our company."
Chelsea is 100% owned by Udenna Management & Resources Corp. (UMRC), a company which according to The Philippine Star held a 3.38% stake in Phoenix Petroleum as of the end of March 2012.
Incorporated in 2006, Chlesea Shipping currently has 10 vessels in its fleet with a total size of 19,561 GRT and according to Pheonix Petroleum, is among the top 5 major petroleum tanker owners in the country.
Business World Online reported Phoenix Petroleum's CFO, Joseph John L. Ong stating that there are currently no plans to grow Chelsea Shipping's business since approximately 90% of their revenues actually come from Phoenix Petroleum.
