A potential government takeover of Petron Corp., led by Ramon Ang, may benefit both the state and the oil refiner, according to CreditSights, a unit of Fitch Group.
The report said Ang would only need to relinquish a 35.9-percent stake to trigger a change of control, while his San Miguel Corp. still holds 71.8 percent of the company, the Philippines’ sole oil refiner.
CreditSights noted that government participation could improve Petron’s credit profile over the long term, providing stronger financial backing for operations and loan repayments.
With state support, Petron could also secure more favorable bank financing terms, potentially reducing borrowing costs and enhancing liquidity for the company.
The Fitch unit said Petron would likely be considered strategically important to the Philippine government, supplying 35 to 40 percent of the country’s domestic fuel requirements.
While the deal may pose short-term challenges such as fuel price controls, operational uncertainties, and large capital expenditures, CreditSights concluded that these risks are outweighed by the potential benefits.
The report also suggested Ang revived his proposal partly to minimize the likelihood of government-imposed price caps on Petron’s products.
Since the Middle East conflict began on February 28, domestic diesel and gasoline prices have surged by more than Php, 80 and Php, 46 per liter, respectively, drawing criticism from lawmakers and transport operators.
