Shell Refining Company Confirms Shell Overseas Holdings Will Sell Stake
SRC to focus operational excellence, business as well as Health, Safety and Environment performance
PORT DICKSON, 2 February 2016
In a statement to Bursa Malaysia today, the Shell Refining Company (Federation of Malaya) Berhad ("SRC") Board announced that it was notified by Malaysia Hengyuan International Limited ("MHIL") that the company had entered into a sale and purchase agreement ("SPA") with the major shareholder of the Company, Shell Overseas Holdings Limited ("SOHL") to acquire 51% of the total and issued paid up share capital in SRC, for US$66.3 million.
Commenting on the development, Datuk Iain Lo, Chairman of the Board of Directors of the Shell Refining Company (Federation of Malaya) Berhad said, "The team at the Shell Refining Company has performed in stellar fashion in the past year. Focusing on strong operational and safety performance as well as product quality, they were in a position to capitalize on the business environment reporting positive financial results after four years of consecutive losses."
He continued, "Even so, SRC continues to be pressured by its debt load and the significant investment required to meet Euro IV and V compliance requirements."
"Whilst the terms of the sale and purchase agreement is a matter that was agreed to between SOHL and MHIL, the Board has been informed by SOHL that a robust sale process was carried out in 2015, with a good mix of local and foreign qualified players selected to participate. MHIL was selected by SOHL based on their financial, technical, and operational capability - in fact, they already produce Euro IV and V fuels in China. In addition, it is MHIL's stated intention to upgrade the refinery Malaysia's fuel specifications and to strengthen SRC's position as a leading regional refinery products supplier," he explained.
He elaborated, "While the deal process is pending conclusion, the SRC management and staff will continue to focus on delivering operational excellence and business results, while maintaining a strong Health, Safety and Environment performance. The SRC Board is now in the process of selecting an independent adviser to advise the non-interested directors of the Company."
The Board of Directors will make further announcements as may be necessary or required.
The Shell Refining Company is a separate independent entity from Shell's other operating units in Malaysia.
Issued on behalf of Shell Refining Company, Malaysia. For further media enquiries, contact: Mr. Leigh Wong, Head of Media Relations & Issues Management
Cell: +60 12 525 8029, Email: email@example.com
About Shell Refining Company
Shell Refining Company (Federation of Malaya) Berhad was formed in 1960 as a public listed company. It currently has 49% public participation and 51% held by Shell Overseas Holding Limited. The Company operates with state-of-the-art technology and is the key petroleum products supplier to Shell Downstream businesses in Malaysia.