KUALA LUMPUR (Jan 31): Petronas Dagangan Bhd’s plan to divest its 100% interest in Vietnam-based Thang Long LPG Company Ltd has hit a roadblock.

This follows the decision of the vendor, Totalgaz Vietnam LLC, to terminate the purchase of the stake held by Petronas Dagangan’s wholly-owned unit PDB (Netherlands) B.V.

“We wish to inform that Totalgaz Vietnam has issued a notice to terminate the sales and purchase agreement (SPA) effective from Jan 31, 2017,” Petronas Dagangan said in a filing with Bursa Malaysia, without specifying the reason for the termination.

“The termination of the SPA is not expected to have any material effect on the Petronas Dagangan’s financial position,” said the Petronas domestic marketing arm, which operates more than 1,000 retail petrol stations in Malaysia.

Petronas Dagangan had said in its 2015 annual report that the planned divestment of its 100% stake in Thang Long was part of its portfolio rationalisation strategy as it grappled with changing market conditions.

Thang Long’s key business activities are storage and bottling of LPG and the lease of a jetty in Vietnam.

It is worth noting that while Petronas Dagangan has failed to sell off  Thang Long, it managed to sell another unit, Petronas (Vietnam) Co Ltd, to Totalgaz Vietnam.

Petronas Dagangan ventured into the liquefied petroleum gas business in Vietnam and the Philippines back in 2002 as it aimed to diversify its revenue and earnings base through geographical expansion in the liquefied petroleum gas business.

In Malaysia, Petronas is the largest distributor of pressurised cooking gas cylinder.

In the 2015 annual report, Petronas Dagangan said the LPG business in Malaysia contributed about 20% to its bottomline.

Petronas Dagangan’s share price closed at RM23.54 today, giving it a market capitalisation of RM23.24 billion.