Thursday 28 Mar 2024
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KUALA LUMPUR (May 26): Shell Refining Company (Federation of Malaya) Bhd (SRC) said today that the sale of its controlling stake to Malaysia Hengyuan International Ltd (MHIL) will give the group a new lease of life.

SRC chairman Datuk Iain Lo also said there will be no changes to the group's business model upon completion of the deal.

He added SRC will maintain its existing business in the supply of products to the Malaysian market.

He also assured there will be no lay-offs due to the deal.

"MHIL is also prepared to underwrite SRC's debt, invest in upgrading the refinery and plans to increase revenue by expanding the value chain to trading and petrochemicals. We view all these development positively," Lo added.

Recall that, China state-owned enterprise Shangdong Hengyuan Petrochemical Co Ltd, through its investment vehicle MHIL, had sealed a deal with Royal Dutch Shell Plc's wholly-owned unit, Shell Overseas Holdings Ltd, to buy the 51% stake in SRC for US$66.3 million or 43 sen a share (RM274.98 million or RM1.80 a share).

MHIL targets to conclude the deal by end of September.

Founded in 1970, Shangdong Hengyuan was previously known as Shangdong Linyi Country Petrochemical Factory. It focuses on petrochemical engineering, oil refining and subsequent chemicals.

The group achieved sales of RMB14.03 billion (RM8.88 billion) in 2014.

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