Petrochemical heavyweight Shell is on the verge of leaving the country as it is facing a bitter battle with its partner Thebe Investment Corporation.
According to City Press, the Dutch/UK-based company is in the throws of an angry and contentious battle with its BEE partner, and according to sources, the Shell leadership team are planning to let staff and its shareholders know of its plans to abandon South Africa this week.
Shell has around 700 petrol stations across the country and this news will impact thousands of its employees.
What has led to the divorce between Shell and Thebe?
There have been several meetings and heated negotiations between Thebe and Shell over the value of Thebe’s stake in the company.
Thebe is accusing Shell of undervaluing their stake in the multinational holding.
The BEE partner values its 28% stake in Shell Downstream South Africa (SDSA) at around R3.7 billion ($200 million).
Shell, however, is contending that the stake is worthless and not even worth the R1.3 billion ($73 million) that Thebe paid for the stake 22 years ago.
If Shell is correct, then Thebe would walk away with nothing, after more than two decades worth of investment.
“This is the great Dutch heist. We, as Thebe shareholders, in fact, all black South Africans feel robbed and used,” a shareholder has told City Press.
In 2022, Thebe reportedly informed Shell that it was exercising its right to use its opt-out clause so that the BEE company could sell its stake in the petrol company.
Thebe wanted to cash out and reinvest their money elsewhere and had every right to do so, according to their contract with Shell.
“Based on the figures and information we received from Shell, we did our calculations to evaluate our stake and submitted it to them,” a shareholder disclosed.
Moreover, Thebe used a top auditing firm to calculate the value of their position for the sale. The company used figures that were sent by Shell and waited for a response from the company.
According to the shareholder, Shell waited eight months to respond and changed their figures to illustrate that there was no value in the Thebe shares.
“They deliberately changed the figures to undermine the value of our stake,” the shareholder said.
“International valuation principles state that stake calculations should be based on the value prevailing on that particular day of opting out. Shell changed this, which was a complete re-engineering for the outcome and back-solving to suit the outcome they themselves desired,” the share shareholder added.
What has Shell got to say?
Shell has responded to these allegations made by the Thebe shareholder and said that they cannot confirm or deny the fact that they may leave South Africa.
“As a matter of policy and principle, Shell Downstream SA distances itself from speculation or rumours, particularly in relation to confidential shareholder agreements and relationships. Out of respect for our partners and these agreements, we’re unable to provide any further comment currently,” Shell spokesperson, Pam Ntaka said.
IOL Business has reached out to Ntaka and Shell in order to examine their position on these allegations and what Shell’s next steps will be.
This is a developing story.
IOL BUSINESS