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||8 October 2009
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Investor interest is rising for the listed exploration unit of state-owned Philippine National Oil Co. (PNOC) with its looming privatisation causing the recent run-up in its share price, according to people familiar with the matter, the Manila Times reported.
A ranking PNOC official said the company has yet to decide on when to sell a substantial block in PNOC-Exploration Corp. (PNOC-EC). “We are still studying it very carefully. It seems like prices at the market are not good,” he said.
The price of PNOC-EC’s B shares rose to a high of almost 25 peso per share last month from less than half in August. At Wednesday’s close, its B shares ended the day at 17 peso per share from its previous close of 19 peso. (1$=48 peso)
PNOC-EC is among the state assets that the Department of Finance plans to sell to raise money and bridge the government’s budget deficit. Finance officials previously said that the department intends to privatise 40 percent of PNOC’s shareholdings in its exploration unit to raise some 10 billion peso to 11 billion peso this year.
The government, through PNOC, controls 99.78 percent of the company while the remaining 0.22 percent is held by the public.
PNOC-EC’s main cash cow is its 10-percent stake in the Malampaya, the Philippines’ largest natural gas field. The company also has interests in a number of oil and gas service contracts across the country.
Joey Roxas, head of Eagle Securities, said PNOC-EC’s stake in the Malampaya might have had more to do with the increase in its share price.
Another factor was PNOC-EC’s minimal float and the possibility that the 40 percent government is eyeing to sell may be offered to the public instead.
The unnamed PNOC official however said that the proposed sale and the mode by which they would go about the privatization of PNOC- has yet to move forward.
Besides PNOC-EC, the executive said the parent firm is also assessing the market’s reception to PNOC-Renewable Corp. (PNOC-RC).
PNOC-RC is the recently established renewable energy arm of PNOC, which is looking to diversify its portfolio in the power sector following government’s privatisation of its geothermal unit, PNOC-Energy Development Corp, last year.
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