Shell Pakistan Limited (SPL) revealed on Wednesday that its parent company, Shell Petroleum Company (SPCo), has informed the board of its intention to sell its shareholding in the business.
The company faced financial challenges in 2022 due to adverse exchange rates, devaluation of the Pakistani rupee, and overdue receivables.
SPL, a subsidiary of SPCo, operates with SPCo owning 77 percent of its local operations.
In a notice to the Pakistan Stock Exchange, SPL stated, “The Board of Directors of Shell Pakistan Limited (SPL), in a meeting held on June 14, 2023, have been notified by SPCo of its intent to sell its shareholding in SPL.”
However, the specific details regarding the amount of the stake being sold by SPCo remain undisclosed at this time.
The notice emphasized that the announcement would not impact SPL’s ongoing business operations, which will continue as usual.
SPL further stated in a press release that the potential sale would be subject to a targeted sales process, the execution of binding documentation, and the receipt of relevant regulatory approvals.
According to the press release, Shell has already attracted significant interest from international buyers, indicating a promising market for the divestment.
The company had experienced a net loss of Rs72.3 million for the year ending December 31, 2022, compared to a profit of Rs4.4 billion in 2021. Despite this setback, SPL’s sales witnessed a notable increase, rising by 48.2 percent year-on-year to reach Rs418.6 billion in 2022.
SPL’s press statement highlighted the company’s expansion efforts during the review period, including the addition of 31 retail stations, 28 Generation-5 Select outlets, and 25 new car wash facilities with tire care services. However, the company did not declare a final cash dividend, despite distributing an interim cash dividend of Rs3 per share for the first nine months of 2022.
As the proposed sale progresses, SPL remains committed to its ongoing operations and awaits further updates on the targeted sales process, including regulatory approvals and the finalization of binding agreements.
