Shell Petroleum Company (SPCo) has announced its intention to sell its shareholding in Shell Pakistan Limited (SPL), according to a notice issued by SPL to the Pakistan Stock Exchange. SPCo, the immediate parent company, currently owns 77% of the local operations.
On Saturday, Finance Minister Ishaq Dar addressed speculations surrounding Shells decision to sell its shares in Pakistan and clarified that the company was not closing its business in the country.
The decision to sell comes as a result of the losses suffered by SPL in 2022, which were attributed to exchange rates, the devaluation of the Pakistani rupee, and overdue receivables.
The notice did not specify the extent of SPCo’s stake that will be sold, but it assured that the sale announcement would not impact SPL’s ongoing business operations.
SPL further clarified in a separate press release that the sale would be subject to a targeted sales process, the execution of binding documentation, and the receipt of applicable regulatory approvals. The company stated that Shell has been receiving strong interest from international buyers.
It is worth noting that SPL had previously reported a net loss of Rs72.3 million for the year ending on December 31, 2022, in contrast to a profit of Rs4.4 billion in 2021. Despite the decline in profitability, the company experienced a significant increase in sales, which rose by 48.2% year-on-year to reach Rs418.6 billion in 2022.
The press statement also highlighted SPL’s expansion efforts during the year, including the commissioning of 31 retail stations, 28 Generation-5 Select outlets, and 25 new car wash facilities with tyre care services.
However, despite the interim cash dividend of Rs3 per share for the first nine months of 2022, no final cash dividend was announced.
The decision to sell SPCo’s shareholding in SPL represents a significant development in the company’s operations, and the subsequent sales process and regulatory approvals will determine the future ownership and direction of SPL.