FIJI HOLDING COMPANY BUYS BP PACIFIC

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India’s Hindustan Petroleum to manage venture

SUVA, Fiji (Fijilive, Dec. 18, 2008) – Fijian Holdings Energy Limited (FHEL), a fully–owned subsidiary of Fijian Holdings Limited (FHL), has won the bid to acquire BP South-West Pacific Limited (BP SWP).

The sale and purchase agreement, executed between FHL and BPSWP in Suva this morning, amounts to FJD$190 million [US$108.5 million]– the largest investment ever by FHL in its 24-year existence.

The operations of the acquired company would be managed by India’s Hindustan Petroleum – a publicly-listed company and the second largest oil company in India generating an annual revenue of US$27 million and operated more than 8000 retail outlets all over India.

"The investment is in line with FHL’s strategic plan to continue to grow and diversify its portfolio in Fiji and the Pacific region," said FHL chairman Isoa Kaloumaira.

He said the newly-acquired BP business included 67 retail outlets and related operations in Fiji, Tonga, American Samoa, Cook Islands, Tuvalu and Vanuatu.

He said the strategic investment would make FHL one of the largest corporate entities in the region with total staff exceeding 1500 and consolidated revenue exceeding $600 million from 2010 onwards.

FHL Group general manager Sereana Qoro said the acquisition would be funded through debt and equity.

"We are talking to our local banks, some of them have been very supportive," Ms. Qoro told Fijilive.

"We will be looking at a syndicate of banks since it’s too big for one bank to fund (this acquisition) so it has to be a syndicate of banks," she said.

She added there could be an overseas bank involved but would not be significant as most funding would be sourced locally.

Qoro said from March 1 next year, the ownership transition would be completed and new managers from a ready-picked team from Hindustan Petroleum would come in.

"We have three to six months to do that from the March 1. We have a lot of work to do, signs or logos would have to change because we will have to de-brand with the new company name."

BP SWP general manager Matt Elliott told Fijilive that there was a strong interest from global and local players, including some local consortiums and some medium-sized businesses across the Pacific, to investigate the sale.

"I can’t talk about specifics of the actual business or the range in terms of how much they offered but I can say it was a very competitive process and we were really pleased because it demonstrates the business is very robust and continues to demonstrate our ability to grow in the future," he said.

Meanwhile, Qoro commended this acquisition indicated a historical achievement when a locally-owned company, for the first time, owned an oil company in the region.

She said oil companies in Fiji were foreign-owned and profits were repatriated overseas.

"For the first time, whatever the companies make will be retained in Fiji and it will be distributed in the form of dividends to our shareholders," Qoro said.

BP SWP had announced in August early this year its intention to investigate the possible sale of its Pacific operations after strong interests were indicated by various companies to buy it off.

Fijilive: http://www.fijilive.com

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