Shell, Saudi Aramco ink Motiva assets separation

Shell

Pernis refinery, Netherlands

A balancing payment of $2.2 billion has been agreed between the parties


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Royal Dutch Shell announced on March 6 the signing of binding definitive agreements between SOPC Holdings East, a US downstream subsidiary of Shell and Saudi Refining (SRI), a wholly owned subsidiary of Saudi Aramco, on the separation of assets, liabilities and businesses of Motiva Enterprises, a 50/50 refining and marketing joint venture.

A balancing payment of $2.2 billion has been agreed between the parties, subject to adjustments including for working capital, Shell said. This value will be satisfied by a combination of SRI assuming more than its 50% share of Motiva’s net debt on completion and a cash payment for the balance. As at December 31, 2016, Motiva’s total net debt was $3.2 billion, of which Shell will assume $0.1 billion, resulting in a deduction to the cash portion of the balancing payment of $1.5 billion. As a result of the transaction no material effect is expected on gearing reported on the Shell balance sheet.

Subject to regulatory approval, the transaction is expected to close in the second quarter of 2017.

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