Shell Refinery sale price severely undervalued, says Perdasama

Shell Refinery sale price severely undervalued, says Perdasama

Malay entrepreneur association says the company’s transaction price of RM1.80 per share indicates a discount of at least 55%.

shell

KUALA LUMPUR:
The Malay Businessmen and Industrialist Association of Malaysia (Perdasama) has strongly opposed the sale of Shell Refinery Company (SRC) to a foreign-held company as it deemed the transaction price of RM1.80 per share to be severely undervalued based on prevailing market rates.

In a statement this evening, its president, Moehamad Izat Emir, questioned the transaction price which he claimed was discounted by at least 55%.

“Perdasama is aware of another offer by a local buyer which was priced between RM4.00-4.20 per share, that would value the company at RM612 million to RM650 million.

“At the current offer price to the foreign company for RM1.80 per share, the total purchase of the refinery is RM275 million.”

Moehamad Izat, who stated that the last time SRC stocks hovered within the RM1.80 per share band was in 1987, questioned the basis for the sale.

He said: “The difference is huge, a total of RM375 million. Why would Shell sell at this price to a foreign company and incur massive losses?”

Yesterday, SRC, the Malaysian refining unit of the oil-and-gas conglomerate, reported that it was selling its 51% stake to Hengyuan International for over US$66 million (RM275 million).

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