Petronas reportedly exploring sale of US$7 billion Canadian business
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Petroliam Nasional Bhd. is considering options for its Canadian company formerly known as Progress Energy Resources Corp., including a sale, according to people familiar with the matter.
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Petronas, as the Malaysian state energy firm is known, is working with a financial adviser on a potential disposal, the people said, asking not to be identified because the deliberations are private. A transaction could value the Canadian business at US$6 billion to US$7 billion, they said.
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Petronas may also consider selling a minority stake in the business, depending on valuation, the people said. The company has started sounding out preliminary interest from prospective buyers, they said.
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Petronas bought Progress Energy for about US$5.3 billion in 2012, boosting the Kuala Lumpur-based firm's shale-gas assets and gas supplies. Petronas also holds a 25 per cent stake in the LNG Canada project, a joint venture for liquefied natural gas in which Shell Plc, PetroChina Co. Ltd., Mitsubishi Corp. and Korea Gas Corp. also participate.
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Lower oil prices have hit Petronas, which reported a slide of more than 30 per cent in net income in 2024 and announced job cuts that will start taking place this year.
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Petronas Canada operates in the North Montney basin in northeast British Columbia and, together with joint venture partners, owns more than 800,000 gross acres of mineral rights with 53 trillion cubic feet of reserves and contingent resources, its website shows.
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And so, we kind of sat back and we were quiet and we were disciplined, and we kind of held our cash for another day. And lo and behold, that day came not that long ago, and we were thrilled to be able to use that money to acquire such a great company. It's a gem and it really is a generational opportunity to be able to acquire the Cole group and, put it into our group of companies. Stockhouse: Absolutely. Now what do they do? JS: Well, they're over a hundred years old, and they were founded in the 1920s, and they have a long proven record of success. They are an industry leading full spectrum logistics company, and they do customs brokerage as kind of their main line of business, and then they also do some freight forwarding and some customs consulting services. They also operate throughout Canada and the US from 43 locations. 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And I'd also say that this round of financing is essentially the same financial terms financial covenants as to the debt that we raised last summer. So really what we did was we de-risked the risk of, of not being able to finance next summer. Who knows where the debt markets and the interest rates are going to be next year. So, what we wanted to do was de-risk it, and, and we used the opportunity to refinance next year's notes along with the Cole acquisition now to really be able to put our balance sheet into a secure position on behalf of our shareholders and really protect that dividend and our balance sheet going forward. Stockhouse: Well, let's lean into that just a little bit further then, Carson. How satisfying is it for Mullen to be able to execute on its strategy despite all of the uncertainty right now in the market? CU: Well, that's a very good point. You know, it is in uncertain times. We're still showing both growth with the Cole acquisition. So, we're growing our business in a time where everyone else is kind of on the defensive and really, we put our balance sheet in a position where, where we can now sit back and deploy capital and not have to worry about financing over the next decade. So really, it's putting us in an enviable position. JS: It sure is. And I think I just add to Carson to say a huge shout out to the team here at Mullen Group. We've done a fantastic job, and I couldn't be more proud of our team and just very excited about what the future holds for Mullen Group. Stockhouse: Absolutely. And there seems to be a lot on the go, and we hope to have you back for further updates soon. Mullen Group Ltd.'s website is and you can find them on the TSX under the ticker symbol MTL. Join the discussion: Find out what everybody's saying about this stock on the Mullen Group investor discussion forum, and check out the rest of Stockhouse's stock forums and message boards. Join the discussion: Find out what everybody's saying on investor discussion forums at Stockhouse's stock forums and message boards. The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.
