EPF reduces stake in Shell Refining

Fitch says the Employees Provident Fund will provide funding in the event of a sell-off by non-residents.

KUALA LUMPUR: The Employees Provident Fund (EPF) Board reduced its shareholding in  Shell Refining Co (Federation of Malaya) Bhd (SRC) after it disposed of 2.08 million shares on Dec 22 to 23.

A filing with Bursa Malaysia on Thursday showed the EPF disposed of 1.396 million SRC shares on Dec 22 and 684,900 shares the next day.

After the diposals, its shareholding was reduced to 6.37% or 19.13 million shares.

On Dec 19, the takeover of SRC became unconditional at an offer price of RM1.92 per share after Malaysia Hengyuan International Ltd (MHIL) acquired 135 million Shell shares via a direct business transaction.

The transaction was made at a considerable discount to SRC’s stock price in the open market. The shares closed at RM2.29 on that day. The total value of MHIL’s stake purchase at RM1.92 apiece was RM274.98mil.

Upon completion of the acquisition, MHIL’s interest in SRC will increase from nil to 51%, thus obligating the company to extend a mandatory takeover offer for the remaining 49% stake that MHIL does not own comprising of 147 million shares.

MHIL is a subsidiary of Heng Yuan Holdings Ltd, which is a subsidiary of China’s Shandong Hengyuan Petrochemical Co Ltd. Its core business is manufacturing of petrochemicals.