Shell‘s planned divestment of a 37.5% stake in the Schwedt refinery in Germany has encountered delays, reported Reuters, citing sources.
The sale to Britain’s Prax Group, initially expected to close in the first half of 2024, is now uncertain due to pending lawsuits and the need for regulatory approvals.
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The complexities arose after Berlin stripped Rosneft, Schwedt’s majority owner, of its control amidst the severing of energy ties between Germany and Moscow in 2022.
However, Rosneft retains its shares, adding to the transaction’s complications.
A clause in the sale agreement stipulates that if the deal is not concluded by mid-September, the parties must either agree to an extension or renegotiate.
The delay is partly due to lawsuits including Rosneft’s attempt to block the sale to Prax, which a German court recently deemed unlikely to succeed.
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By GlobalDataDespite the stake being valued between €155m and €190m ($173m–212m), it has been attributed a negative equity value of around €14m, according to sources and deal documents.
Shell said that it is still collaborating with Prax to finalise the sale.
Meanwhile, Prax Group stated that it will refrain from additional comments until the transaction is concluded.
Rosneft has not responded to requests for comment.
The German Government has been cautious about expropriating Rosneft’s assets in the country, which is possible under tightened energy security regulations.
Shell has been seeking to divest its stake in the refinery, which supplies approximately 90% of Berlin’s fuel, for several years.
An initial attempt to sell to the Vienna-based group Alcmene in 2021 was thwarted by Rosneft’s pre-emption.
Further complicating the sale, a ruling by the Berlin administration court in November theoretically greenlit Alcmene’s acquisition of Shell’s stake, adding another layer to the already complex situation.
Earlier this month, the German Government extended its trusteeship over Rosneft’s local units until 10 March 2025, considering a potential sale of these assets to Qatar.
