Shell Petroleum will sell its Pakistan stake.

 Shell will sell 77 percent of its stake in a Pakistani company to exit.

 

On Wednesday, Shell Pakistan Limited (SPL) announced that its parent company, Shell Petroleum Company, would be leaving Pakistan by selling its 77% stake in the country's business.

 

The move was made after Shell Pakistan (SPL) suffered losses in 2022 as a result of overdue receivables, exchange rates, the devaluation of the Pakistani rupee, and the country's financial crisis and economic slowdown.

 

"The Directorate of Shell Pakistan Restricted (SPL), in a gathering of its Board hung on June 14, 2023, have been told by The Shell Oil Organization Restricted (SPCo) of its expectation to sell its shareholding in SPL," the nearby organization said in a stock recording of Wednesday.

 

"A targeted sales process, the execution of binding documentation, and the receipt of applicable regulatory approvals will be required for any sale."

 

According to the company, the announcement would not affect its ongoing business operations.

 

Shell Pakistan stated in a separate statement that the development was a result of "simplifying Shell's portfolio."

 

A spokesperson for Shell Pakistan stated, "Shell Pakistan has been in the country for 75 years and has a substantial retail footprint and a strong lubricants business."

 

"A targeted sales process, the execution of binding documentation, and the receipt of applicable regulatory approvals will all be required for any sale." International buyers are very interested in Shell."

 

According to financial experts, Pakistan's current economic situation and global consolidation were the primary reasons for the departure.

 

Sherman Securities Head of Research Farhan Mahmood told Arab News, "They are consolidating their financial position and have also curtailed retail business in some other countries."

 

"Apart from this, it could be because of Pakistan's particular circumstances caused by the fluctuations in the exchange rate."

 

In its new monetary report, Shell Pakistan said the funds and productivity of the organization kept on being influenced by the ongoing financial difficulties affecting the country.

 

In its financial statements for the quarter ended March 31, 2023, which were made available on the stock exchange, the company stated, "The Company continues to bear the burden of overdue legacy receivables of PKR 5,331 million from the Government of Pakistan."

 

The Company suffered significant exchange losses as a result of the period's unprecedented rupee-to-dollar depreciation of 26%. To further reduce its exposure to foreign exchange losses and recover legacy receivables, the management of the company continues to actively engage with government authorities.

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