Petronas plan to exit Vietnam's Thang Long LPG fails

Petronas plan to exit Vietnam's Thang Long LPG fails

Petronas Dagangan Bhd's (PDB) intention to exit its entire equity in
Vietnam-based Thang Long LPG Co Ltd has fallen through as Totalgaz Vietnam,
the tentative buyer, has cancelled the deal.

The Petroliam Nasional Bhd (Petronas) subsidiary announced in a stock
exchange filing on January 31 that Totalgaz Vietnam had issued a notice to
terminate the Sale and Purchase Agreement, without elaborating on the
reasons for winding up the transaction.

Prior to the disclosure, both parties had twice extended the fulfillment
period of transferring 100 per cent equity interest of the Vietnam-based LPG
storage and bottling firm, since early December 2016.

The agreement to divest the asset to Totalgaz Vietnam had been reached on 11
November 2015.

Interestingly, that was also the date of agreement on selling 100 per cent
of Petronas Vietnam Co Ltd to Totalgaz Vietnam. This transaction was then
completed on 24 May 2016. PDB said the divestment was "in the best interest
of the company".

Meanwhile, in the January 31 notice, the Malaysian company disclosed that
the termination of the Thang Long LPG deal will not have any material effect
on PDB's financial situation.

Local Vietnamese media had reported the two acquisitions, if concluded,
would fortify Totalgaz's position in the Vietnam market as the second
largest LPG player. Totalgaz Vietnam had historically purchased Saigon Gas
in 2008 and Vinagas in 2012 for this purpose.

No deal values for these aforementioned transactions were given.

Earlier last year, SapuraKencana Petroleum Bhd, another Malaysian energy
major, also announced to cancel the plan to acquire three shallow water
upstream assets in Vietnam from Petronas, a $400 million agreement reached
in 2014.

SapuraKencana Petroleum had earlier indicated that the acquisitions would
significantly boost its presence in Vietnam as it will give the company "an
immediate foothold in the promising oil provinces offshore Vietnam with cash
generating assets that will be earnings accretive to the group".

However, the reasons for the termination of the deal remain unknown.

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Link to Original Article:
http://www.dealstreetasia.com/stories/petronas-plan-to-exit-vietnam-based-th
ang-long-lpg-runs-into-hiccups-64025/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com