Thebe Investment Corporation says it pulled out of its involvement with oil company Shell two years ago but there is a dispute between the parties about the value of shares sold back to the petroleum giant.
The investment company on Wednesday dismissed claims that Shell’s planned exit from SA forecourts was due to a strained relationship between the two companies.
“This is incorrect. Shell’s relationship with Thebe is not the reason for Shell exiting South Africa. Thebe Investment has recently been informed formally by Shell of their intention to exit the downstream business in South Africa,” the company said.
Thebe confirmed there was a dispute about how Thebe’s shares should be valued.
Thebe acquired 28% shares in Shell Downstream SA (SDSA) in 2002 through debt funding and its own cash resources.
After reviews of investment strategies and its portfolio landscape to meet long-term goals, Thebe’s board decided to “exit its investment with SDSA”.
Shell was notified in 2022 and the value of the shares was determined by a pre-agreed formula and valuation by Thebe’s independent valuation expert according to international standards.
Shell, however, delayed the finalisation of the transaction, said Thebe.
“A dispute has arisen between Thebe and Shell as to how Thebe’s shares should be valued. Thebe believes its approach is the correct one and is consistent with the agreed valuation formula.”
The matter has been referred to arbitration as meetings between Thebe and Shell ended in deadlock.
“Since April 2023, Thebe and Shell have held several meetings to try to resolve the valuation differences. These meetings have not been fruitful and to resolve the impasse, Thebe has referred this matter to arbitration in terms of the provisions of the shareholders agreement. This process is under way.”
Meanwhile, the company said it was honoured to have contributed to the oil industry and supported the growth of Shell’s downstream business in SA.
“Driving transformation and building communities is our purpose and through the Shell downstream investment and partnership over the years, Thebe is honoured to have contributed to the oil industry.”
The oil giant has more than 600 outlets in SA since it started operating in the country in 1902. Shell confirmed its intention to exit SA on Monday after a worldwide review of its downstream and renewable business.
TimesLIVE
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