Shell Gas Holdings Malaysia (Shell) announced that it has completed the sale of its 15% shareholding in Malaysia LNG Tiga (MLNG Tiga) to the Sarawak State Financial Secretary (SFS) for an agreed consideration of $750 million.
“The transaction has an economic date of 1 September 2017 and the net final consideration paid to Shell after adjustments for dividends the company received up to completion is approximately $640 million.”
So far, MLNG Tiga plant’s shareholders were Petronas 60% Shell 15%, Nippon Oil 10%, Sarawak state-owned Sarawak State Financial Secretary (SFS) 10% and Mitsubishi’s Diamond Gas 5%, according to the Global LNG Info’s Database. After completion of Shell’s equity acquisition, SFS’s share in the MLNG Tiga increased to 25%.
“This sale is consistent with Shell’s strategy to simplify its portfolio and reshape Shell into a simpler, more resilient and focused company,” the major said in its statement, adding that following the expiry of the MLNG Satu and Dua joint venture agreements, MLNG Tiga was Shell’s only remaining interest in the Malaysia LNG complex. “Completion of this sale demonstrates the clear momentum behind Shell’s delivery of its global divestment programme.”


Backgrounds:

On 14-Oct-2016, Bloomberg reported that Shell is considering a sale of its stake in a Malaysian LNG plant, which could fetch more than $1 billion. Shell is gauging interest in its 15% stake in MLNG Tiga Sdn., which may draw interest from private-equity firms, people familiar with the matter told the media, adding that Malaysia’s state-owned Petronas which holds 60% of MLNG Tiga, has pre-emptive rights on the stake.
The disposal is part of the Anglo-Dutch energy giant’s plan to raise $30 billion from asset sales in the three years through 2018 to help cut borrowings after its acquisition of BG prompted Fitch Ratingsto lower its credit rating. The company’s total debt ballooned to $90.3 billion at the end of June, from $52.9 billion a year earlier, data compiled by Bloomberg show.
“The pressure is on Shell to slim down its global footprint following the BG acquisition as the major is also looking to remove mature, high ongoing-cost assets and rebalance towards growth and long-life ‘cash cow’ assets.”
Meanwhile, a spokesman for Petronas said he couldn’t immediately comment. Shell regularly receives expressions of interest for its assets and continues to evaluate all opportunities and proposals, it said, adding that all such discussions are commercially confidential.