Sri Lankan government is to conclude the re-acquisition deal of Shell Gas Lanka (Pvt) Ltd. (SGLL), the country’s largest Liquid Petroleum Gas (LPG) player in the very near future.
“The due diligence was earlier conducted and the Shell deal will be concluded in the very near future,” Sirisena Amarasekera, chairman of the Cabinet appointed Negotiating Committee overseeing the Shell deal and Prime Minister’s Secretary, told The Bottom Line.
Another senior official close to the deal confirmed that it was ‘unofficially finalised’ that the government will buy Shell’s 51 percent holding.
Last June, SGLL’s parent company- Royal Dutch Shell (RDS) offered to sell Shell Gas Lanka Ltd. and its wholly-owned subsidiary, Shell Lanka Terminal Ltd., as a part of its worldwide strategy to review its business units in Europe, Asia and Latin America. While the government already owns 49 percent stake of Shell Gas Lanka Ltd., Shell Lanka Terminal Ltd. is fully owned by the RDS. On June 17, the government expressed its willingness to take-over Shell Gas Lanka.
Earlier, W K H Wegapitiya, Chairman, Laugfs Holdings Ltd., Shell Gas Lanka’s rival and also a prospective bidder, announced that Laugfs too was interested in purchasing Shell Gas Lanka after his visit to London for negotiations with Royal Dutch Shell.
SGLL has been engaged in importing, storing, filling, marketing and selling LPG in Sri Lanka since 1995, after 51 percent of the then Colombo Gas Company was sold to Shell for US $ 37 million during the then Chandrika Bandaranaike Kumaratunga regime.
Shell virtually ran a monopoly till the second player, Laughs Gas, entered the local LP Gas market. Third players - Mundo Gas and Power Gas never succeeded to take off the ground due to undercutting by an existing player.
