Shell Petroleum to sell stake in Pakistan

Shell Pakistan said on Wednesday that parent Shell had notified it of the group’s intent to sell its shareholding in the business.

Shell Petroleum Company (SPCo), the immediate parent company, owns 77 per cent of the local operations, which suffered losses in 2022 due to exchange rates, the devaluation of the Pakistani rupee, and overdue receivables.

“… 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.

It is unclear how much of its stake SPCo is selling.

“This announcement does not impact SPL’s current business operations, which continue,” the notice said.

In a separate press release, SPL said that any sale would be “subject to a targeted sales process, the execution of binding documentation and the receipt of applicable regulatory approvals”.

“Shell is seeing strong interest from international buyers,” the press release said.

In March, SPL had reported that its net loss for the year ending on Dec 31, 2022, remained Rs72.3 million versus a profit of Rs4.4 billion in 2021.

The drop in the bottom line was in contrast with the company’s sales, which rose 48.2pc year-on-year to Rs418.6bn in 2022.

A press statement said the company increased its footprint in the year under review and commissioned 31 retail stations, 28 Generation-5 Select outlets and 25 new car wash facilities with tyre care.

There was no final cash dividend, even though the interim cash dividend for the first nine months of 2022 was Rs3 a share.