By August 2008, Ashmore Group is expected to join the board of Petron Corp., Philippine's largest oil refiner. Currently, both PNOC and Aramco each have four nominee directors on Petron's board. Upon completion of the transaction, Aramco's nominees will step down and be replaced by Ashmore nominees.
The transaction for sale of Saudi Arabia's Aramco Overseas Co.'s 40% stake to London-based fund manager Ashmore Global Special Situations Fund Ltd. is expected to be concluded shortly. Ashmore offered Aramco US$550 mln for the stake. Aramco is bound to complete the sale to Ashmore within 90 days after the expiration of Petron parent firm Philippine National Oil Co.'s right to make a counter-offer on the Aramco shares. PNOC's right expires 60 days after its receipt of the transfer notice from Aramco. Since the transfer notice was received by PNOC on March 13, its right to purchase the shares expired on May 12. Consequently, the period for completion of the transaction expires on Aug. 10, 2008. Composition of Petron's board is also bound to change by August.
PNOC has preferred not to exercise its right of first offer for the Aramco shares, because of:
* Government's long-standing policy of privatization of state-owned commercial assets
* Cost to the government of such a purchase, particularly at a time when it has more pressing priorities such as food security and essential infrastructure projects.