Tuesday, 2 February 2016

Shell Refining shocker, shares sold significantly below market value

Royal Dutch Shell, the global oil giant, is selling its entire 51% stake in a refinery in Port Dickson to a Chinese company in a transaction that values the asset significantly lower than its market price.

In a statement, Shell said it was disposing of its majority stake in Shell Refining Company (Federation of Malaya) Bhd or SRC to Malaysia Hengyuan International Ltd (MHIL) for US$66.3mil (RM276mil).

The transaction values SRC at RM551mil, or RM1.80 a share, while the market capitalisation of the company as at Friday’s close was RM1.48bil at RM4.94.

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