JAKARTA: Indonesia's petrochemical and energy company PT Chandra Asri Pacific is set to acquire ExxonMobil's Esso-branded retail fuel network in Singapore, marking its first foray into the city-state's downstream fuel sector.
The company announced the deal last Friday, saying the transaction would be carried out through a special purpose vehicle owned by a wholly owned subsidiary of the group.
The transaction, which remains subject to regulatory approval, is expected to be completed by the end of this year.
The financial terms of the agreement were not disclosed.
"Expanding into Singapore's retail fuel ecosystem is a strategic step toward developing an integrated platform for regional growth," said Chandra Asri president director and chief executive officer Erwin Ciputra in a statement.
Chandra Asri said the acquisition supports its long-term plan to build an integrated energy and mobility platform across South-East Asia, as the group seeks to diversify beyond its core petrochemical business.
"The strong retail fuel network and business climate in Singapore provide a solid foundation for Chandra Asri Group to continue growing as a leader in energy, manufacturing and infrastructure solutions in South-East Asia," Erwin added.
Under the agreement, Chandra Asri will continue to operate the stations under the Esso brand and source branded fuels from ExxonMobil.
The group will also retain all current employees involved in running the business.
ExxonMobil Asia Pacific chair and managing director Geraldine Chin said the sale reflects the United States energy giant's shift toward a branded wholesale model.
"The decision aligns with how we market fuel globally and supports our ongoing efforts to optimise our business portfolio," Chin said, as quoted by CNA last Friday.
She added that the divestment would not affect ExxonMobil's integrated manufacturing complex in Singapore, which continues to supply fuel to regional and global commercial markets.
"We expect business as usual during the transition and will work closely with Chandra Asri to maintain service quality and loyalty programme benefits for customers."
Chandra Asri reported a significant rebound in performance in the first half of the year, booking revenue of US$2.91bil, a 236% surge from US$866mil in the same period last year.
The sharp increase was supported by contributions from its new oil refinery segment, which generated around US$1.16bil, while the chemical business remained the main revenue driver at US$2.16bil, and infrastructure contributed US$103.24mil.
However, the company's cost of revenue also jumped 248% year-on-year to US$2.97bil.
As a result, Chandra Asri recorded a gross loss of US$61.12mil in the first six months of this year, reversing from a gross profit of US$12.85mil in the same period last year.
Despite the operational loss, the company still managed to post a net profit of US$1.63bil, compared with a net loss of US$46.23mil in the first half of last year, mainly due to foreign exchange gains and other income. Established in 1992, Chandra Asri Group is Indonesia's largest integrated petrochemical and infrastructure company and part of the Barito Pacific Group.
Operating the country's only naphtha cracker, the company has since expanded into energy, logistics and port services. --- The Jakarta Post/ANN