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End-September deadline for sale of FTI, PNOC-EC

Vol. XXII, No. 185 [ BusinessWorld Online ]

Thursday, April 23, 2009 | MANILA, PHILIPPINES


THE GOVERNMENT has set an end-September deadline to sell Food Terminal, Inc. (FTI) and a stake in Philippine National Oil Co.-Exploration Corp. (PNOC-EC), with the proceeds expected to shore up revenues amid expectations of a higher deficit.

Finance Secretary Margarito B. Teves said the government would take into account market conditions as well as legal issues before they dispose of the two big-ticket items, which are expected to generate P21 billion in additional cash.

"For FTI, the worst case is the 30th of September. The same is true for the PNOC-EC. We are looking at end of second quarter until the last week of the third quarter. That is for the actual bidding and sale," he said.

The government originally sought to privatize the two assets last year. Mr. Teves said a poor market delayed the sale of 40% of the state’s 99.79% stake in PNOC-EC, while the privatization of FTI was stalled by the presence of existing leases.

For FTI, the option being considered is the sale of parts of the property not encumbered by contracts.

"Initially we are thinking of disposing close to 80 hectares, then another 24 hectares, more or less. We are not waiting until last contract is terminated. We need to generate resources," Mr. Teves said.

He stressed, however, that the government would not sell assets at a loss even if it needed funds to support its infrastructure and social programs.

"We have some thresholds. You don’t go to extremes. Why sell the assets at a loss?," Mr. Teves said.

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