Petronas Dagangan hits a snag in Vietnam business sale

Petronas petrol station. Reporter Joseph Chin. .-Art Chen/ The Star.

KUALA LUMPUR: Petronas Dagangan Bhd’s (PDB) plan to divest its entire Vietnam business has hit a snag, as Totalgaz Vietnam Ltd Liability Co (TGV) cancelled an agreement to buy its liquefied petroleum gas (LPG) storage and bottling subsidiary, Thang Long LPG Co Ltd (TLLCL).

PDB, the principal domestic marketing arm of Petroliam Nasional Bhd, told Bursa Malaysia that TGV had issued a notice to terminate the 2015 agreement that it signed with PDB’s unit PDB (Netherlands) BV effective from Jan 31.

PDB’s statement did not give any reason why the deal fell through despite the parties having agred to two time extensions since last December. Interestingly, PDB had managed to complete the divestment of its other indirect unit in Vietnam -- LPG processor and distributor Petronas Vietnam Co Ltd -- to TGV on May 24 last year.

PDB had acquired TLLCL and Petronas Vietnam Co at the same time, in late 2012, as part of its regional expansion strategy. But, as part of a regional portfolio review just three years later to address the changing market environment, the company decided to divest its business in Vietnam.

That led to PDB inking a deal to sell both TLLCL and Petronas Vietnam Co to Totalgaz in December 2015. No contract value was ever mentioned.