Malaysia’s Petronas Chemicals Group Berhad’s (PCG) wholly-owned Petronas Chemicals Fertiliser Sabah Sdn Bhd unit has entered into a share purchase agreement (SPA) with the State Government of Sabah’s wholly-owned oil and gas company SMJ Sdn Bhd to divest a 25% equity stake held by PCG in the fertilizer unit, according to a report by Malaysia’s Sun Daily, citing a PCG filing to Bursa Malaysia.
The total consideration for the stake divestment deal is RM1.25 billion (approximately $280 million at current exchange rates), an amount based on the net book value of the plant, property, and equipment of Petronas Chemicals Fertiliser Sabah as of the financial year ended Dec. 31, 2022, according to the report, citing the PCG filing.
PCG and the Sabah State government entered into a Heads of Agreement for the divestment of the shareholding in January (GM Jan. 13, p. 30).
The divestment is expected to be completed by the end of the second quarter of 2023, and will leave PCG with a 75% stake and give SMJ a 25% interest in the fertilizer unit.
Petronas Chemicals Fertiliser Sabah operates an integrated ammonia and urea production complex in Sipitang Oil and Gas Industrial Park in the municipal district of Sipitang, approximately 145 kilometers southwest of Kota Kinabalu, the mercantile city in Sabah State on the Island of Borneo. The facility’s daily production capacity includes 2,100 mt for ammonia and 3,850 mt for urea, according to Green Markets’ data.