Cosco Capital cleared to divest Liquigaz shares

MANILA, Philippines — Cosco Capital Inc., the investment holding firm of retail magnate Lucio Co, has secured the go-ahead of the Philippine Competition Commission (PCC) to sell all of its shares in Liquigaz Philippines Corp. to Fernwood Holdings Inc.

“The Philippine Competition Commission has resolved to take no further action with respect to the proposed acquisition of Liquigaz Philippines Corp. by Fernwood Holdings Inc.,” Cosco Capital said in a disclosure to the Philippine Stock Exchange.

In its decision, PCC said the sale of Liquigaz is not expected  to result in substantial lessening of competition within the market for bulk and cylinder supply of LPG in the Luzon market.

The regulator said “there is neither increased ability nor incentive to engage in input foreclosure and customer foreclosure, post acquisition”.

It added that after the acquisition, there would still be “sufficient competitive constraints” in the LPG industry.

In October last year, Cosco Capital announced it was selling its entire its stake in Liquigaz through its subsidiary Canaria Holdings Corp., which signed a share purchase agreement with Fernwood Holdings.

It is disposing a total of 826,530 shares to Fernwood, including the 36,075 shares of Calor Phil. Holdings Inc., a holding company jointly owned by Canaria Holdings (60 percent) and Liquigaz (40 percent).

Cosco Capital did not disclose the transaction amount, which is “less than 12 percent of the total asset of Cosco Capital Inc. as of December 2017” at P111.61 billion.

It acquired Liquigaz in August 2014 at a cost of about $80 million. Prior to its entry, Liquigaz was formerly a unit of SHV Energy of the Netherlands.

Liquigaz is currently the second-largest supplier of LPG in the Philippines with a 22.88 percent share, behind oil giant Petron Corp. at 28.99 percent, based on the  latest data from the Department of Energy.