Petron Privatisation Should Bring Much-Needed Investment

The Philippine government confirmed on December 6 that the Ashmore Group, a UK based and EM investment fund, would buy its 40% stake in oil refiner Petron for around PHP25.7bn (US$524mn). The deal represents a 57% premium to the firm's closing price of PHP4.35 a share on December 5 and would raise Ashmore's stake in Petron to around 90%. This arrangement will likely be short lived, however, as Philippine food and drink giant San Miguel has confirmed that it will subsequently acquire a 51% stake. Certainly the Philippine government will be glad of the cash, which will go some way toward helping it keep its budget deficit within its target of PHP75bn this year and exceed the current privatisation target of PHP29.6bn.

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