Sources say Royal Dutch Shell plc has shortlisted five potential bidders for its downstream LPG business in Peninsular Malaysia.
It is learnt that the shortlisted companies are BStead, KUB, LTAT (Ramunia/Alam Maritim) KKB and IPS.
The disposal is similar to Shell divesting its LPG business in other parts of Asia in concentrating on the upstream business.
BH Petroleum, a wholly owned subsidiary of BStead Holdings, is said to be the favorite in the shortlist, based on its reach and brand presence. BStead is said to be trying to grow its petroleum related businesses, including LPG. Contributions from the petroleum business has yet to play a significant role in the group earnings,
The other strong contender is said to be Sarawak based KKB Engineering. If KKB wins the bid, it would have a significant presence in the LPG business where Shell is one of the top two LPG distributors in Malaysia .
KUB has an LPG distribution business that is based mainly in East Malaysia . However, the distribution is small and not a significant contributor to the company’s overall business.
As for LTAT, it has some interests in the O&G business via Ramunia Bhd and a JV with Alam Maritim Bhd. However, these listed companies are involved in the upstream O&G industry. Also, Ramunia does not have a core business and it would beneficial for LTAT if it were to purchase the Shell LPG business.
The dark horse is IPS as the former Shell chairman Datuk Saw is one of its directors.
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