Shell to sell Pakistan unit to Saudi firm
Reuters Published November 1, 2023
Reuters Published November 1, 2023
Shell Pakistan on Wednesday said its parent company’s unit, Shell Petroleum Company, has signed a deal with Saudi-based Wafi Energy to sell domestic operations.
Shell Petroleum Company, the international arm of Shell , said the sale is expected to complete by the fourth quarter of 2024, subject to regulatory approvals.
In June, Shell Petroleum Company said it would exit Pakistan with the sale of its 77 per cent shareholding.
The move comes after Shell made several announcements about its global operations and after Shell Pakistan (SPL) suffered losses in 2022 due to exchange rates, the devaluation of the Pakistani rupee, and overdue receivables, and as the country faces a financial crisis and economic slowdown.
“… the Board of Directors of Shell Pakistan Limited (SPL), in a meeting of its board held on June 14, 2023, have been notified by SPCo of its intent to sell its shareholding in SPL,” SPL said in a notice to the Pakistan Stock Exchange.
“This announcement does not impact SPL’s current business operations, which continue,” the notice said.
Wafi Energy is a wholly-owned affiliate of Asyad Holding Group, a fuel retailer in Saudi Arabia.
Shell Pakistan’s operations include more than 600 mobility sites, 10 fuel terminals, a lubricant oil blending plant and a 26pc shareholding in Pak-Arab Pipeline Company Limited.Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.
Shell Petroleum Company, the international arm of Shell , said the sale is expected to complete by the fourth quarter of 2024, subject to regulatory approvals.
In June, Shell Petroleum Company said it would exit Pakistan with the sale of its 77 per cent shareholding.
The move comes after Shell made several announcements about its global operations and after Shell Pakistan (SPL) suffered losses in 2022 due to exchange rates, the devaluation of the Pakistani rupee, and overdue receivables, and as the country faces a financial crisis and economic slowdown.
“… the Board of Directors of Shell Pakistan Limited (SPL), in a meeting of its board held on June 14, 2023, have been notified by SPCo of its intent to sell its shareholding in SPL,” SPL said in a notice to the Pakistan Stock Exchange.
“This announcement does not impact SPL’s current business operations, which continue,” the notice said.
Wafi Energy is a wholly-owned affiliate of Asyad Holding Group, a fuel retailer in Saudi Arabia.
Shell Pakistan’s operations include more than 600 mobility sites, 10 fuel terminals, a lubricant oil blending plant and a 26pc shareholding in Pak-Arab Pipeline Company Limited.Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.
Published November 1, 2023
KARACHI: Shell Pakistan Ltd (SPL) said on Tuesday it has received a public announcement of intention from Saudi Arabia-based WAFI Energy LLC to buy up to 77.42 per cent of its shares, which are currently held by the oil firm’s foreign sponsor.
The potential acquirer is a Saudi retail gas station network and a sole licensee of Shell retail pumps in the Gulf nation.
Earlier in June, SPL told investors that its foreign sponsor planned to divest its entire 77.42pc stake in the oil marketing company (OMC) as part of “simplifying” its global portfolio.
Shell Petroleum Company Ltd, which is a subsidiary of Shell plc, is currently the single largest shareholder in the Pakistani firm. The general public owns 15.2pc shares while the rest is controlled by public-sector companies, banks and mutual funds etc.
Takeover regulations require that any share purchase agreement with a majority shareholder must follow a public offer to help small investors take advantage of the deal. Therefore, the second leg of the acquisition will consist of a public offer for half of the remaining shareholding in SPL that’s currently held by minority investors.
As such, the potential acquirer will make a public offer for 11.29pc shareholding in the target company at an equal or higher share price than the one quoted to the foreign sponsor for its majority stake.
At the going market rate of Rs163.92 a share, the value of the foreign sponsor’s entire shareholding in the OMC is around Rs27.1 billion.
The sale of the sponsor’s shareholding in SPL will include its downstream business as well as a 26pc stake in Pak-Arab Pipeline Company Ltd.
In July, Pakistan Refinery Ltd and Air Link Communication Ltd also expressed their interest in jointly buying majority shares of SPL. Last month, Bloomberg News reported that the world’s largest oil company Saudi Aramco is exploring the possibility of making a bid for SPL. Similarly, British investment firm Prax Overseas Holdings Ltd also expressed interest in buying the local OMC.
SPL posted a net profit of Rs6.4bn for the January-September period, up 125.2pc from a year ago.
SPL is the third-largest OMC with a share of roughly 7.1pc in volumetric sales recorded in the first quarter of 2023-24. Its volumetric sales in July-September dropped 15pc year-on-year to 272,000 tonnes.
Published in Dawn, November 1st, 2023
KARACHI: Shell Pakistan Ltd (SPL) said on Tuesday it has received a public announcement of intention from Saudi Arabia-based WAFI Energy LLC to buy up to 77.42 per cent of its shares, which are currently held by the oil firm’s foreign sponsor.
The potential acquirer is a Saudi retail gas station network and a sole licensee of Shell retail pumps in the Gulf nation.
Earlier in June, SPL told investors that its foreign sponsor planned to divest its entire 77.42pc stake in the oil marketing company (OMC) as part of “simplifying” its global portfolio.
Shell Petroleum Company Ltd, which is a subsidiary of Shell plc, is currently the single largest shareholder in the Pakistani firm. The general public owns 15.2pc shares while the rest is controlled by public-sector companies, banks and mutual funds etc.
Takeover regulations require that any share purchase agreement with a majority shareholder must follow a public offer to help small investors take advantage of the deal. Therefore, the second leg of the acquisition will consist of a public offer for half of the remaining shareholding in SPL that’s currently held by minority investors.
As such, the potential acquirer will make a public offer for 11.29pc shareholding in the target company at an equal or higher share price than the one quoted to the foreign sponsor for its majority stake.
At the going market rate of Rs163.92 a share, the value of the foreign sponsor’s entire shareholding in the OMC is around Rs27.1 billion.
The sale of the sponsor’s shareholding in SPL will include its downstream business as well as a 26pc stake in Pak-Arab Pipeline Company Ltd.
In July, Pakistan Refinery Ltd and Air Link Communication Ltd also expressed their interest in jointly buying majority shares of SPL. Last month, Bloomberg News reported that the world’s largest oil company Saudi Aramco is exploring the possibility of making a bid for SPL. Similarly, British investment firm Prax Overseas Holdings Ltd also expressed interest in buying the local OMC.
SPL posted a net profit of Rs6.4bn for the January-September period, up 125.2pc from a year ago.
SPL is the third-largest OMC with a share of roughly 7.1pc in volumetric sales recorded in the first quarter of 2023-24. Its volumetric sales in July-September dropped 15pc year-on-year to 272,000 tonnes.
Published in Dawn, November 1st, 2023
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