KARACHI – Days after the multinational oil and gas company Shell announced it is leaving Pakistan, the state-owned Pakistan Refinery Limited (PRL) and private firm Air Link Communication came forward on Monday with the decision to acquire the stakes of Shell Pakistan.
Shell Pakistan Limited (SPL) announced in June that its parent company, Shell Petroleum Company (SPCo), would be exiting Pakistan with the sale of its 77.42 percent shareholding in the local business.
The move came after SPL suffered losses in 2022 due to exchange rates, massive devaluation of the Pakistani rupee and overdue receivables, and as the country faces a daunting financial crisis and economic slowdown. The company continues to bear the burden of overdue legacy receivables of PKR 5,331 million from the Pakistani government, according to its financial statements for the quarter ended on March 31, 2023.
To support its intention to improve and simplify its portfolio, Shell Petroleum Company had initiated a sales process to sell its shareholding in Shell Pakistan Ltd, including all of SPL’s downstream businesses and SPL’s 26 percent ownership of the Pak-Arab Pipeline Company Ltd. (PAPCO). On Monday, Air Link and PRL disclosed their intention to acquire Shell Pakistan’s shares through the equities brokerage and investment banking firm, Next Capital Limited, via a notice to the Pakistan Stock Exchange.
“We, Next Capital Limited, hereby submit a Public Announcement of Intention by Pakistan Refinery Limited and Air Link Communication Limited (collectively referred to as the “Acquirers”) to acquire 77.42 percent shares and control of Shell Pakistan Limited (’Target’),” Next Capital Limited, the offer’s manager, said on behalf of both companies.
PRL, a subsidiary of the state-owned Pakistan State Oil (PSO), is one of five refineries operating in Pakistan. PSO owns 63.56 percent shareholding of PRL while the Pakistani government directly holds 22.47 percent shareholding of PSO, according to stock filing records. Meanwhile, Air Link Communication primarily focuses on distributing and manufacturing smartphones and their retail management.
Shell will sell its 165.7 million shares worth an estimated Rs19 billion ($69.4 million) at a closing share price value of Rs115.25, according to calculations based on stock filings and the Pakistan Stock Exchange’s website. Shell Pakistan’s stock price increased by Rs4.75 or 4.3 percent on Monday in response to the acquisition development.
Next Capital Limited’s chief executive officer declined to comment on the offer.
