Corral Petroleum Holdings AB (CPH), the parent company of Sweden's largest refiner, fuels distributor- and retailer Preem Holding AB/Preem AB (Preem) has disclosed that a process aimed at exploring strategic options, including the potential sale of Preem, has been initiated.
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Preem operates two refineries,in GothenburgandLysekilrespectively, that have a total combined refining capacity of over 18 million m3per year. This is about 80 percent of the Swedish refinery capacity and about 40 percent of the Nordic capacity.
According to a statement, Preem Holdings AB is in a strong financial position, having generated sales of SEK 161 billion (≈ EUR 13.86 billion) and an operating profit (EBIT) of SEK 14.8 billion (≈ EUR 1.27 billion) in 2022. The Company continues to deliver strong results in 2023 and has a total available liquidity of SEK 16 billion (≈ EUR 1.37 billion) and a net leverage ratio of 0.3x as of the end of June 2023.
Following instructions from Preem’s ultimate owner, Sheikh Mohammed Hussein Al Amoudi, the Board of Directors in Corral Petroleum Holdings has been tasked with undertaking a review process aimed at exploring strategic options including a potential sale of shares in the Company, which may include (albeit not limited to) a sale of 100 percent of the shares in the Company.
The Board intends to conduct the review in a “thorough and timely” manner, taking the Company’s various stakeholders’ interests into account, including strengthening the financial position of the group as a whole and the interest of the ultimate owner to prepare for an orderly succession within the Al Amoudi family.
The review will also take into consideration that Preem is classified as critical infrastructure under the Protective Security Act, and a potential transaction will be reviewed under the Swedish Foreign Direct Investment (FDI) Act, which enters into force on December 1, 2023.
The management is on a strong trajectory to deliver the most ambitious and critical plan in the Company’s history. Preem’s goal is to significantly increase renewable fuel production capacity in the coming years. The goal is to produce 5 million m³ of renewable fuels and have climate-neutral operations by 2035 at the latest. This would position the Company as one of the leading producers of renewable fuel in Europe, a bold ambition representing an industrial evolution that will require a long-term perspective and unwavering dedication, commented Jason Milazzo, Chairman of the Board of Directors of CPH.