In a statement issued to the market today, Fijian Holdings Limited confirmed that the acquisition of BP SWP Ltd is going ahead and settlement is expected to happen in a few weeks, upon finalisation of overseas funding agreement.

In making the announcement today, FHL Managing Director, Mrs Sereana Qoro said “This deal is not only the biggest but one of the most significant investment breakthroughs in FHL’s history.” Mrs Qoro added that “it has always been the desire of FHL to invest in the lucrative Petroleum industry. In fact FHL participated a few years ago in the bid to purchase Shell Co., in the early stages of the bidding process, which was eventually won by TOTAL.”

Furthermore, Mrs. Qoro said that this move is in line with FHL’s 3 year Strategic Plan to selectively grow its investment portfolio by expanding into the Pacific region. The acquisition should also be a milestone for Fiji as a nation, now that for the first time a major petroleum company operating in the Pacific region will be locally owned and which has positive implications on Fiji’s foreign reserves in the long term.

In terms of BP SWP Ltd, Mrs Qoro stated that “the petroleum business is well established with 60 years of successful trading history, well integrated around 6 countries in the Pacific and highly profitable as a going concern. The decision to purchase was made only after proper due diligence process involving a detailed review of the legal, technical and financial aspects of the petroleum business and which covered questions on crude oil price movements, future maintainable profit, ability to generate cash and meet financial obligations including loan repayments, returns on investment and associated payback period. The due diligence was conducted by experts from Deloittes, an internationally recognized firm specialized in Mergers and Acquisitions in the petroleum industry.”

In terms of managing the new petroleum company, Mrs Qoro added that FHL has already signed a Management Agreement with Hindustan Petroleum Corporation Ltd (HPCL) and a team of 9 professionals are already in the country led by the HPCL Head of Retail Operations.  A key feature of the Management Agreement covers the Business Performance benchmarks and deliverables that HPCL as Managers are expected to deliver during the term of the agreement.

As announced to the market in December 2008, Mrs Qoro maintains that the current staff of BP SWP Ltd will not be affected and there will not be any staff redundancies. In fact, the spirit of the Management Agreement encourages training and development of our local staff for succession in the future just as FHL has done in other subsidiary companies.

In conclusion, Mrs. Qoro said that FHL reassures all shareholders that the investment in BP SWP Ltd met all the investment benchmarks that FHL has always used over the years except that this time around, FHL is making a record quantum leap commensurate not only with its present net worth but also with its much larger net worth as a group after the acquisition.

Once the settlement is done, FHL will disclose full details of the acquisition to the market through South Pacific Stock Exchange.


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