Shell Leaving Pakistan Selling its Shareholdings in SPL
Shell intends to leave Pakistan selling its shares at around 77% specifying no issue but probably over a high economic loss and financial crisis.
In a letter addressed to the General Manager of the Pakistan Stock Exchange, Shell Pakistan Limited (SPL) has expressed its intention to divest its shareholding in Shell Pakistan. The board of directors of SPL convened a meeting on June 14, 2023, during which they were informed by Shell Petroleum Company Limited (SPCo) about its plans to sell its holdings in SPL. SPCo currently owns 77.42% of SPL.
The move comes after SPL suffered losses in 2022 due to several factors, including the devaluation of the Pakistani rupee, exchange rate fluctuations, and overdue receivables. The company also faces headwinds from the country's financial crisis and economic slowdown.
In its notice to the Pakistan Stock Exchange (PSX), SPL said that the board of directors had been notified of SPCo's intention to sell its shareholdings. The notice did not specify a reason for the sale, but it said that SPCo would continue to support SPL during the transition period.
The sale of SPL's shares is likely to have a significant impact on the Pakistani oil and gas industry. SPL is one of the largest oil and gas companies in Pakistan, with a network of over 780 petrol stations and a market share of around 20-25%. The sale could lead to increased competition in the market and could drive down prices for consumers.
It remains to be seen who will acquire SPCo's stake in SPL. However, the sale is a sign of the challenges facing the Pakistani oil and gas industry. The industry is struggling with several factors, including the devaluation of the rupee, exchange rate fluctuations, and overdue receivables. The country's financial crisis and economic slowdown are also putting pressure on the industry.
The sale of SPL's shares is a significant development for the Pakistani oil and gas industry. It remains to be seen who will acquire SPCo's stake in SPL and what impact the sale will have on the industry.
