Shell Petroleum Company has decided to exit Pakistan by selling its 77 per cent stake in the local business. This move follows Shell’s recent updates on its global operations and concerns about the economic difficulties in Pakistan.
In a notice submitted to the Pakistan Stock Exchange (PSX), Next Capital Limited, the managing party representing the Acquirers, Pakistan Refinery Limited and Air Link Communication Limited, declared their intention to acquire a majority stake of 77.42 per cent in Shell Pakistan Limited.
Next Capital stated, “We, Next Capital Limited, hereby submit a Public Announcement of Intention by Pakistan Refinery Limited and Air Link Communication Limited (collectively referred to as the “Acquirers”) to acquire 77.42 per cent shares and control of Shell Pakistan Limited,” reflecting their involvement in the transaction.
Speaking to Reuters, Airlink CEO Muzzaffar Hayat Piracha confirmed that the acquisition is a joint venture between Pakistan Refinery Limited and Airlink. However, the specific details regarding the shareholding distribution between Airlink and Pakistan Refinery Limited will be disclosed at a later stage, as stated by Piracha.
For Airlink, entering the petroleum business aligns with its strategic objective of diversification. Airlink, primarily known as a smartphone distributor, manufacturer, and retailer, views this expansion as a progressive step.
Pakistan Refinery Limited (PRL), which operates as one of the five refineries in Pakistan and functions as a subsidiary of Pakistan State Oil Company Limited, did not provide an immediate response to the request for comment.
Shell Pakistan faced financial setbacks in 2022 due to fluctuations in exchange rates, the devaluation of the Pakistani rupee, and unsettled receivables. These challenges were further compounded by the ongoing financial crisis and economic slowdown experienced by the country.