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Philippines' San Miguel eyes Malaysia's state assets sale

Company chief sees opportunities in Mahathir's drive to cut debt

MANILA -- San Miguel, the Philippines' largest company by sales, is eyeing the acquisition of state-owned assets in Malaysia, as the government of Prime Minister Mahathir Mohamad looks to trim the country's debt.

San Miguel President and Chief Operating Officer Ramon Ang said he expects the Malaysian government to unload some of its assets following revelations that the country's debt was higher than previously claimed.

Mahathir estimated last month that Malaysia's national debt was equivalent to 65% of the economy or 1 trillion ringgit ($251 billion), higher than the 50.8% level at end-2017 claimed by his predecessor, Najib Razak.

In May, Mahathir took office as Malaysia's prime minister for a second time in an unprecedented election that saw the opposition take power for the first time since independence. The 92-year old leader vowed to cut down debt and restore the country's reputation following Najib's scandal-tainted regime.

"I think they will be doing a lot of privatization so it looks like there are opportunities," Ang said. San Miguel, he said, is particularly interested in the oil and power sectors.

San Miguel has a presence in Malaysia through Petron, its fuel refinery and retailing arm. Petron's net sales rose 21% to 129.1 billion pesos ($2.43 billion) in the first three months of 2018 compared with a year ago. However, volume was flat at 26.6 million barrels amid higher global oil prices and a new excise tax over the same period. Petron's revenues account for half of San Miguel's total sales.

Petron expanded in Malaysia in 2011 when it acquired the Malaysian businesses of Exxon Mobil. It now operates 600 service stations and its Port Dickson refinery which produces 88,000 barrels per day. Last year, Petron said it would invest $3.5 billion to expand the refinery's capacity to 178,000 barrels per day.

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