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New Straits Times (Malaysia): Shell Refining seeks new loan to repay debt ( 12 May 05



May 12 2005


SHELL Refining Co (Federation of Malaya) Bhd is raising some RM532 million from a new loan to mainly repay older debt as it seeks to lower finance costs, sources said.


The firm, 52 per cent controlled by Dutch oil giant Shell, will borrow from Japan’s Bank of Tokyo-Mitsubishi Bhd. The parties are set to sign the five-year loan agreement today, according to an advisory sent by Shell Refining.


“The pricing is quite low and the mandate was given to the Bank of Tokyo,” a source familiar with the deal told Business Times.


Shell Refining, which operates an oil refinery at Port Dickson, has an outstanding amount of RM577.6 million under an unsecured term loan as at end-December 2004, according to its latest annual report.


The company’s finance cost for 2004 was RM15.78 million, a 12 per cent drop from RM17.98 million in 2003. It had a record year in 2004 as it posted its best-ever profit due to improved margins. Net profit more than tripled to RM670.34 million on the back of a 36 per cent rise in turnover to RM7.51 billion.


This enabled Shell to declare its highest total gross dividend payment of 65 sen a share last year. It plans to maintain an annual payout level of at least 45 sen a share.


Shares of Shell have fallen by more than 5 per cent this year, underperforming the broader market’s 1 per cent fall. It rose half a per cent to close at RM9.20 yesterday.


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