By Staff Reporter
ISLAMABAD: Pakistan Refinery Limited (PRL) and Air Link Communication, a smartphone distributor and manufacturer, said on Monday they would jointly acquire the majority stake of Shell Pakistan Limited (SPL), as the oil giant exits the country amid a financial crisis.
The two companies announced their intention to buy 77.42 percent of Shell Pakistan’s shares and control of the company, which includes its downstream businesses and its 26 percent ownership of the Pak-Arab Pipeline Company Ltd. (PAPCO).
The deal is worth an estimated Rs19 billion, based on Shell Pakistan’s closing share price of Rs115.25 on Monday.
The acquisition is subject to regulatory approvals and other customary closing conditions, the companies said in a joint statement.
Shell Petroleum Company, the parent company of Shell Pakistan, said in June it would sell its stake in the local business as part of its portfolio simplification strategy.
Shell Pakistan has been operating in the country since 1899 and has a network of over 780 fuel stations and seven oil depots.
Shell Pakistan has been struggling with losses due to exchange rate fluctuations, devaluation of the Pakistani rupee, and overdue receivables from the government, which amounted to Rs5.33 billion as of March 31, according to its financial statements.
Pakistan is facing a daunting economic slowdown and a balance of payments crisis that has forced it to seek loans from the International Monetary Fund and other lenders.
Shell Pakistan’s share price rose by 4.3 percent on Monday after the acquisition news, while Pakistan Refinery’s share price fell by 1.7 percent and Air Link’s share price remained unchanged.
Pakistan Refinery is a subsidiary of the state-owned Pakistan State Oil (PSO), which owns 63.56 percent of its shares. PSO is the largest oil marketing company in Pakistan, with a market share of over 50 percent.
Air Link Communication is a leading smartphone distributor and manufacturer in Pakistan, with partnerships with brands such as Huawei, Samsung, Tecno, and Infinix. It also operates a network of retail outlets across the country.
The deal will enable Pakistan Refinery and Air Link to diversify their businesses and benefit from Shell Pakistan’s assets and expertise, the statement added.
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