Complaint against Phoenix filed by former shareholder

BY RUBY ANNE M. RUBIO, BusinessWorld Senior Reporter Trading company Oilink International Corp. is asking the Securities and Exchange Commission to revoke the effectivity of the registration statement of fuel products retailer Phoenix Petroleum Philippines, Inc. which will do its initial public offering on Wednesday. In separate letters dated July 3 and June 29, corporate administrative supervisor Rochelle E. Vicencio said properties of Phoenix consisting of storage tanks in Davao City are the subject of a civil case pending before Branch 14 of the Regional Trial Court of Davao City. Oilink is the trading arm of independent petroleum player Unioil Petroleum Philippines, Inc. "Phoenix represented.. there are no materal and legal proceedings pending or threatened against the company or in which the property of the company is the subject of. The above statement is false and fraudulent," she wrote. Ms. Vicencio said Phoenix, then known as Oilink Mindanao Distribution, Inc., was a joint venture company capitalized on a 50-50 basis by Udenna Holding Corp. and Oilink International Corp. to engage in the operation of storage facility and trading of fuel and petroleum products in Mindanao. A shareholders agreement was entered into on May 15, 2002. "Due to some disagreements, Udenna and Oilink agreed to end their partnership in December 2003 with the latter agreeing to sell to the former its shares in Phoenix under the express condition that two of the three storage tanks owned by Phoenix would be leased to Oilink," she said. It was "explicitly agreed" that the storage tanks will not be leased out to Oilink competitors as stated in the memorandum of agreement dated Dec. 17, 2003 which was then amended on Jan. 7, 2004. "In violation of the agreements, Udenna refused to lease the storage tanks to Oilink and filed the civil case to rescind the same," Ms. Vivencio said. "In its answer with counterclaim, Oilink prayed for the damages as well as for an injunction to prevent Udenna, as the controlling shareholder of Phoenix, from leasing out the storage tanks to Oilink’s competitors," she added. Taking into account Udenna had rescinded the agreements, Ms. Vicencio said the legal effect is to revive the shareholders agreement between the parties that will revert Oilink as the 50% owner of Phoenix. This, as BDO Capital & Investment Corp., Phoenix’s underwriter for the initial public offering, said the sale of its shares to small local investors was four times oversubscribed. The Sy-led company has provided the Philippine Stock Exchange the results of the local small investors application ballotting. The listing of 145 million Phoenix Petroleum shares is set tomorrow. It will have a stock trading symbol of PNX. Last June 14, the PSE approved the application submitted by Phoenix for the listing of 145 million common shares with a par value of P1 at the second board. Shares were to be sold for P9.80 apiece through an initial public offer. The company stands to generate P355.25 million from the IPO, the proceeds of which would be used for capital expenditures and working capital requirements. Phoenix Petroleum has more than 20 retail service stations all over the country. It plans to set up 25 to 30 more service stations by yearend and expand the network to up to 140 stations by 2010.