KARACHI: Hascol Petroleum Ltd is selling 15 per cent of its equity stake to Vitol Dubai Limited, which will have an option to buy another 10pc within one year.

“We would like to inform that a term sheet has been signed by Vitol Dubai Limited with the major shareholders of Hascol Petroleum Limited to buy 15pc of the issued share capital of Hascol,” company secretary Zeeshanul Haq said in a filing on Tuesday.

The news, however, received a cool response from the stock market where Hascol’s stock dropped by Rs6 on Tuesday to close at Rs157.86.

Several market dealers said the major reason for investors concern could be the price, which Hascol has yet to announce, at which Vitol would acquire the 15pc stake.

Hascol’s market value is about $190 million, putting the 15pc stake at around $28.5m, according to Reuters news agency.

But some sector observers said that while Pakistan State Oil (PSO), Shell Pakistan and Attock Petroleum have been the major oil marketing companies (OMCs), Hascol Petroleum is relatively a new kid on the block.

The company was granted a full marketing licence by the government in February 2005. On March 31 this year, Hascol held Rs15 billion in total assets. The company primarily deals in three major products: motor spirits, high speed diesel and furnace oil.

Hascol came in full public view last year when it made the book-building and public offer of 25m shares at the floor price of Rs20 per share and strike price of Rs56.50m, mopping aggregate subscription of Rs1.41bn.

Three quarters of the shares on offer amounting to 18.75m were offered in book-building and 6.25m shares in Initial Public Offering (IPO).

A key concern in the minds of some market experts has been the absence of a strong group backing for Hascol Petroleum.

“Attock Petroleum is under the fold of the Attock Group, Shell International takes care of Shell Pakistan while the government holds major equity in PSO and Parco supports Total,” says a sector expert.

By contrast, Hascol seems to be a one-man mission. Its chairman and CEO, Mumtaz Hasan, holds the majority equity in the company which at March 31, 2015 showed a paid-up capital at Rs906m.

Published in Dawn, November 11th, 2015