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New Post has been published on http://www.therakyatpost.com/business/2015/01/13/petronas-scraps-south-africa-unit-sale/

Petronas scraps South Africa unit sale

KUALA LUMPUR, Jan 13:

Petronas has scrapped plans to sell its 80% stake in Engen Petroleum Ltd, South Africa’s biggest fuel retailer.

The decision was conveyed in a letter late last year, said Zama Luthuli, corporate affair vice president at PetroSA, South Africa’s state-owned oil company which had sought to buy the Engen stake from Petronas.

South African publication Business Day reported Luthuli as saying: “I can confirm that our CEO, Ms Nosizwe Nokwe-Macamo, received a letter dated Dec 17, 2014 from Petronas. The matter will be dealt with at the next PetroSA board meeting before the end of January 2015.”

The Petronas letter was also sent to Energy Minister Tina Joemat-Pettersson, reported the publication.

“The Treasury was not convinced by the business case made by PetroSA. There was concern that PetroSA’s balance sheet could not carry the debt,” the publication said.

The deal is said to have been valued at 18 billion rand (RM5.58 billion) whereas PetroSA has only five billion rand in cash reserves currently.

PetroSA now does not have any retail fuel operations now while Engen has a refinery in Durban and operates around 1,600 service stations across Sub-Saharan Africa.

The bid for Engen would have given PetroSA direct access to customers in over 20 African countries.