Karachi, 17 June, 2023 (GNP): Shell Petroleum Company Ltd. (Shell) announced on Wednesday its decision to divest its 77 percent stake in Shell Pakistan Ltd., signifying its withdrawal from Pakistan following a successful 75-year presence.
This move came in response to Shell Pakistan’s ongoing financial challenges, attributed to various factors including the devaluation of the rupee and overdue receivables amidst the country’s economic slowdown.
The planned sale encompasses Shell Pakistan’s downstream businesses and its 26 percent ownership in Pak-Arab Pipeline Company Ltd., including mobility and lubricants divisions.
Shell Pakistan reassured that the intended divestment would have no impact on its ongoing business operations, which will continue unaffected.
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Furthermore, to streamline and optimize its portfolio, Shell Petroleum Company Ltd. has initiated the sales process for its 77.42% shareholding in Shell Pakistan Ltd., as stated by Shell Pakistan in a notice filed with the Pakistan Stock Exchange.
The Board of Directors of Shell Pakistan Limited (SPL) was informed of Shell Petroleum Company Limited’s (SPCo) intent to sell its shareholding during a board meeting held on 14 June, 2023, according to SPL’s stock filing.
The proposed sale will follow a targeted sales process, the completion of binding documentation, and the acquisition of relevant regulatory approvals.
A spokesperson for Shell Pakistan commented on the divestment, noting that it aligns with Shell’s strategy to simplify its portfolio.
Shell Pakistan boasts a significant retail presence and a strong lubricants business, further emphasizing its appeal to potential international buyers. The divestment is attracting considerable interest from various entities.
Wael Sawan, Shell’s new CEO, has expressed intentions to increase dividends and share buybacks while ensuring steady oil output until 2030.
Additionally, Shell is conducting a strategic review of its energy and chemical assets in Bukom and Jurong Island, Singapore.
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Recently, Pakistan has witnessed the departure of several multinational corporations. Shell, one of the oldest multinational companies operating in Pakistan, currently operates over 600 fuel stations.
Moreover, it has enjoyed a presence in the country for 75 years.
The announcement of Shell’s stake sale in Shell Pakistan Ltd. led to a surge in its stock. It has reached the daily limit of a 7.5 percent increase and marked the highest closing price in three months.
