THE Development Bank of Jamaica (DBJ) yesterday announced that Petroleum Company of Jamaica Ltd (Petcom) has been sold to Phoenix Fuels and Accessories Limited for US$19 million ($2.3 billion).
Petcom is a wholly-owned subsidiary of Petroleum Corporation of Jamaica (PCJ). The operation includes 24 Petcom-branded service stations and 14 liquid petroleum gas filling plants across the island.
Milverton Reynolds, managing director of the DBJ, said yesterday that the agreement for the sale of Petcom to Phoenix Fuels — a local petroleum retailing company — was signed last Friday at the offices of the PCJ on Trafalgar Road, in St Andrew.
“The proceeds of the sale of Petcom… are US$19 million ($2.3 billion) and will involve the transfer of 100 per cent of the shares of Petcom and real estate assets owned by the PCJ but used or operated by Petcom to the purchaser,” the DBJ said in its announcement.
Closing is expected to take place within 90 days of the date of the agreement.
The DBJ noted that, “after intensive discussions between the Petcom negotiation team and the preferred bidder, Cabinet approved the final negotiated sale terms for the privatisation of Petcom to Phoenix Fuels and Accessories Limited on February 15, 2016.”
“I am happy that we were able to conclude these negotiations successfully and must pay tribute to all the negotiators on both sides who did such a sterling job as well as the Petcom Enterprise Team which did much of the leg -work,” Reynolds was quoted as saying.
GK Capital Management Limited, led by Managing Director Steven Whittingham, and Investment Banking Manager Douglas Robinson, was the lead negotiator on behalf of Phoenix Fuels and Accessories Limited. Vaccianna & Whittingham were the attorneys for the purchaser.
The Government’s negotiating team was led by Nerine Small, PCJ’s senior legal counsel, and the Petcom Enterprise Team was chaired by Erwin Jones. The negotiating team and Enterprise Team were supported by DBJ as secretariat and transaction managers, Dunn Cox as legal advisors; and Ernst & Young as strategic consultants.
The Petcom privatisation opportunity was first advertised by the DBJ on April 26, 2015, and the bid submission deadline was extended twice — from June 30, 2015 to July 14, 2015 and subsequently to August 18, 2015. Following evaluation of the bids, Phoenix Fuels & Accessories Limited was selected as the preferred bidder in November 2015.
Other bidders who did not make the cut were Rubis Caribbean Holdings and Sol Investments Limited. One other Jamaican bidder, EDJ acquisitions, did not turn in its bid in time and was disqualified.