Shell Refining Company's majority shareholder may sell out

KUALA LUMPUR: Shell Refining Company (Federation of Malaya) Bhd (SRC) said its majority shareholder Shell Overseas Holdings Ltd is still reviewing its strategic options, including the possibility of disposing of its 51% stake in SRC.
Shell Overseas is expected to take a few more months to reach a decision.
SRC chairman Iain Lo said it is further reviewing two strategic options namely the conversion of its refinery in Port Dickson and a potential sale of shares by Shell Overseas Holdings, which holds a 51% stake in SRC.
"Considering these options will take time. There are two possible scenarios - the conversion of the terminal or a new majority shareholder. We will evaluate the options and make appropriate recommendations to the shareholders," he told reporters at its AGM today.
Lo said the current uplift in refining margins has relieved some of the pressure to act in the near term.
However, Shell Overseas Holdings will need to make a decision soon, in view of SRC's heavy debt load, including a short term loan of RM450 million due on Dec 31, 2015. The loan was originally due on June 15, 2015.
SRC also has a long term loan amounting to US$240 million due in September 2016.
Lo said a shareholders meeting will be called to decide on the matter after completing the review.