LONDON, Feb 1, 2016:
Royal Dutch Shell plc has agreed to sell its shareholding in the Shell Refining Company (SRC) in Malaysia to Malaysia Hengyuan International Ltd (MHIL).
The sale of its 51% shareholding in the refining company is for US$66.3 million (RM275.2 million) and the transaction is expected to complete in 2016, subject to obtaining regulatory approval.
In a statement, Shell said it is MHIL’s intention for SRC to invest in the upgrades needed to meet the Euro 4M and Euro 5 requirements for fuel sold in Malaysia.
“Shell Malaysia Trading will ensure security of supply to its retail and commercial customers in Malaysia and honour other existing commitments through an existing comprehensive supply strategy that includes a long term offtake from SRC.”
It said the SRC stake sale is consistent with Shell’s strategy to concentrate its global downstream footprint and businesses where it can be most competitive.
“Malaysia continues to be an important country for Shell. Shell is the leading retail fuels and lubricants provider and continues to invest in growing these businesses in the country.”
It said other recent downstream divestments include the sale of downstream businesses in Australia and Italy; a number of retail sites in the UK; and the initial public offering of, and further drop downs to Shell Midstream Partners LP.
Shell has also agreed to the sale of its marketing business in Denmark and Norway, its LPG businesses in France and a 33.24% shareholding in Showa Shell Sekiyu KK.