Billionaire Saudi-Ethiopian, Mohammed Al-Amoudi worth $5.2 billion, has shown consideration to selling subsidiary, Preem AB, Sweden’s largest fuel company and a prominent producer of advanced renewable fuels
In a statement by the company, the decision to explore strategic options, including a potential sale of Preem, was initiated following directives from Sheikh Mohammed Hussein Al Amoudi, the ultimate owner of Preem. Corral Petroleum Holdings AB (CPH).
Preem has more than 550 petrol stations and two refineries in Gothenburg and Lysekil, which constitute roughly 80% of Sweden’s and 40% of the Nordic refining capacity, up to 18 million cubic meters annually. The company is on the cusp of a significant change, the most ambitious in its history.
The company’s mission is to become highly profitable and climate-neutral by 2035 while maintaining its role as a supplier of renewable and traditional fuels to customers both in Sweden and abroad.
What you should know
Chairman of the Board of Directors of CPH, Jason Milazzo, expressed confidence in Preem’s journey, saying,
- “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.”
Financially, Preem Holdings AB is in excellent shape. In 2022, it reported impressive sales of SEK 161 billion($14.6 billion) and an operating profit (EBIT) of SEK 14.8 billion($1.3 billion).
The company’s strong performance continued into 2023, with total available liquidity of SEK 16 billion($1.4 billion) and a net leverage ratio of just 0.3x as of June 2023.
The decision to consider a sale comes with careful deliberation. Sheikh Mohammed Hussein Al Amoudi has tasked the Board of Directors of CPH with overseeing a thorough review process.
This process will explore various strategic options, potentially including the sale of 100% of Preem’s shares. The Board is committed to conducting this review meticulously and expeditiously, with a keen focus on the interests of various stakeholders.
One significant consideration is the status of Preem as a critical infrastructure asset in Sweden.
The review process will also take into account the strengthening of the financial position of the entire Al Amoudi family group and prepare for an orderly succession within the family.