PRL and Air Link Aim to Secure 77.42% Stake and Gain Control of Shell Pakistan

Pakistan Refinery Limited (PRL) and Air Link Communication (AIRLINK) have announced plans to purchase a 77.42% share in and control Shell Pakistan Limited.

In a notification to the Pakistan Stock Exchange (PSX) on Monday, brokerage firm Next Capital Limited, which was appointed manager to the offer, announced the development.

“Next Capital Limited (Manager to the Offer) has submitted a Public Announcement of Intention (“PAI”) on behalf of Pakistan Refinery Limited (PRL) and Air Link Communication Limited (Air Link) on July 17, 2023, to acquire 77.42% shares and control of Shell Pakistan Limited by PRL and Air Link under the Securities Act, 2015 and the Listed Companies (Substantial Acquisition of Voting Shares & Takeovers) Regulations, 2017,” according to the notice.

PRL is one of five refineries in Pakistan that produce and sell petroleum products. It is a division of the Pakistan State Oil Company Limited.

Meanwhile, Air Link Communication is one of the country’s smartphone distributors, producers, and retailers, with a statewide network.

Background

Shell Pakistan Limited revealed this month that its parent firm, Shell Petroleum Firm Limited (SPCo), has informed it of its intention to sell its stake in SPL.

“We hereby inform you that The Shell Petroleum Company Limited (SPCo) has notified the Board of Directors of Shell Pakistan Limited (SPL) of its intent to sell its shareholding in SPL in a meeting of its Board held on June 14, 2023,” read the notice, sent in June.

SPL stated at the time that the development would have no effect on its current business operations, which would continue.

While the announcement did not disclose the amount of shareholding SPCo intends to sell – it had a 77.42% stake in SPL as of December 31, 2022 (a little over 165.7 million shares), according to the annual report for that year – a company statement did convey that the oil giant is “seeing strong interest from international buyers”.

SPL is a subsidiary of Shell Petroleum Company Limited, United Kingdom, which is a subsidiary of Royal Dutch Shell Plc, one of the world’s largest energy and petrochemical companies.

The company sells petroleum products and compressed natural gas, as well as blends and sells a variety of lubricating oils.

Shell Pakistan Limited published its financial performance for the first quarter of 2023 in May, which was badly damaged by the country’s prolonged economic crisis.

The company’s earnings turned crimson in 1QFY23 compared to a similar time last year – from a profit after tax of Rs2 billion to a loss of Rs4.6 billion.

The loss was caused by extraordinary rupee depreciation, soaring inflation, and macroeconomic uncertainty.

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