The stock of Royal Dutch Shell plc (NYSE:RDS.A) closed at $68.59 gaining 0.84% in yesterday’s trading session. In a bid to offload its refinery operations in Denmark, Royal Dutch Shell has disclosed that it intends to move ahead with the $80 million sale.
It was back in September 2016 when the company signed the divestment deal with Dansk Olieselskab AS, a deal which involved the sale of Shell’s Fredericia refinery and local trading and supply activities.
If everything moves according to plan, the deal might come to a close by the end of 2017 and will of course be subject to the satisfactory conditions in place. But It was expected that the deal would come to a close by the end of 2017 in the event that everything moved according to plan.
The deal was also expected to align to satisfactory conditions, but matters did not play out according to plan since the deal was called off after Dansk Olieselskab and Shell failed to reach a consensus on the deal. That was of course within the confines of the stipulated time.
The company had for over quite some time considered lowering the debt arising from the $50 billion mega acquisition of BG Group and it thought that the divestment plan would help a huge deal. It was fundamentally part of its $30-billion global divestment program set for the 2016-2018 periods and its portfolio optimization strategy. The undertaking was also part and parcel of the company’s plan which was to help streamline and upgrade the company’s portfolio. Since its establishment, the company has always targeted upgrading and streamlining its portfolio and the move was in line with that.
A person familiar with the matter said, “However, with Shell already closing more than $23 billion divestment deals, it remains on track to meet its target by 2018. Further, the company announced asset disposals worth around $2 billion and additional $5 billion divestment deals are already in advanced stages of talks for prospective transactions.”
In its many years of operations, Shell, has reaffirmed its priorities in a bid to cut down on its debt as well as curb costs.