KUALA LUMPUR (Jan 22): Shell Refining Co (Federation of Malaya) Bhd said its major shareholder Shell Overseas Holdings Ltd is in discussions with China's state-owned enterprise (SOE) Shandong Hengyuan Petrochemical Co Ltd.

It was responding to media reports this week, which had said Shandong Hengyuan Petrochemical will invest US$130 million to acquire loss-making Shell Refining.

"Upon enquiry, the board (of Shell Refining) has been informed that while Shell Overseas is considering a sale of its shares in the company, no agreement for the sale of its shares has been reached with Shandong Hengyuan Petrochemical or any other party," Shell Refining said in a filing with Bursa Malaysia today.

"The board would like to state that any sale of shares is a matter for Shell Overseas, and confirms that the board has not received any offers for Shell Refining's shares or received any notice on the potential investment mentioned in the newspaper articles," it said.

Shell Refining also clarified that no decision has been made on whether to convert the refinery owned by Shell Refining into a storage terminal, adding that its board will make further announcement if and when it is appropriate or required.

On Jan 20, The Edge Financial Daily and Sin Chew Daily reported that Shandong Hengyuan Petrochemical will invest US$130 million (RM565 million) to acquire Shell Refining. However, when asked about the matter on Wednesday, Shell Refining said it had nothing to announce at that point of time.

"Shell Refining is a separate independent entity from Shell's other operating units in Malaysia," the company's spokesperson told The Edge Financial Daily then.

Shell Overseas holds a 51% stake in Shell Refining. The Employees Provident Fund is the second largest shareholder of Shell Refining with a 15.93% stake, followed by Permodalan Nasional Bhd at 12.63%, and Kumpulan Wang Persaraan (Diperbadankan), 2.38%.

Shell Refining shares closed 5 sen or 1% higher at RM5.03 today, giving it a value of RM1.49 billion.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)