Saudi Arabia’s WAFI Energy eyes acquisition of Shell Pakistan Limited

WAFI Energy LLC, one of the leading fuel station companies in Saudi Arabia, is eyeing 77.42% shares and control of Shell Pakistan Limited (SHEL).

Shell Pakistan announced the development in its notice to the Pakistan Stock Exchange (PSX) on Tuesday.

“It is hereby informed that Shell Pakistan Limited (SHEL) has received firm intention from WAFI Energy LLC to acquire control of 165,700,304 (up to 77.42%) voting shares of the target company, beyond the thresholds prescribed under Section 111 of the Act,” read the notice.

As per the notice, WAFI Energy LLC is a fast-growing retail gas station network and sole licensee of Shell Retail Network (gas stations) in Saudi Arabia.

In a separate notice, brokerage house Arif Habib Limited (AHL) said that it has been appointed manager to WAFI Energy’s offer and submitted the public announcement of intention to acquire up to 77.42% shares of Shell Pakistan.

In this notice, AHL said WAFI Energy was incorporated in 2012 with an authorised and paid-up capital of 3 million Saudi Riyal.

Back in June this year, Shell Pakistan Limited announced that its parent company, Shell Petroleum Company Limited (SPCo), had notified its intent to sell its shareholding in the Pakistani entity.

Back then, Shell Pakistan said that the development would have no impact on its current business operations, which will continue.

While the announcement back then 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”.

In July, Pakistan Refinery Limited (PRL) and Air Link Communication (AIRLINK) also jointly expressed their intention to acquire the majority stake and control of Shell Pakistan Limited.

Later, Bloomberg, citing people familiar with the matter, reported that Saudi Aramco is exploring a potential bid for Shell Plc’s assets in Pakistan. The deal could mark the oil-rich nation’s first foray into the South Asian nation, the report added then.

The Bloomberg report said the divestment plan comes as Shell executes a strategy under Chief Executive Officer Wael Sawan to increase returns to shareholders and cut businesses that aren’t making enough money.

Earlier this month, Prax Overseas Holdings Limited (Prax), a UK-based company, expressed its intention to acquire a majority stake and control of Shell Pakistan Limited.

As per SHEL’s latest financial results, the OMC delivered a profit after tax of Rs6,450 million for the nine months ended September 30, 2023, compared to the profit after tax of Rs2,864 million made in the same period last year.