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Treasury scuppers PetroSA’s bid to buy Engen stake

Johannesburg - Treasury has denied a request from state-owned oil company PetroSA to borrow internationally to buy Petroliam Nasional Bhd’s stake in the nation’s biggest fuel retailer.

PetroSA “submitted requests for a foreign borrowing limit” to acquire Petronas’s 80% stake in Cape Town-based Engen Petroleum, Jabulani Sikhakhane, a spokesperson for Treasury, said in an e-mailed response to questions. Permission “was not given,” he said, declining to give reasons.

Business Day reported on Tuesday that Petronas, as the Malaysian state oil company is known, pulled out of the R18bn deal because of a lack of funding.

Treasury was concerned that PetroSA’s balance sheet won’t be able to carry the debt, the newspaper said, without saying where it got the information.

PetroSA has received a letter from Petronas, Zama Radebe-Luthuli, vice president of corporate affairs for PetroSA, said by phone, declining to disclose the content of the letter and comment on the possible sale.

The purchase would have given PetroSA, which operates a 45 000 barrel-a-day refinery at Mossel Bay, the ability to sell directly to consumers.

Engen has a 135 000-barrel-a-day refinery in Durban, according to the company’s website.

Petronas took control of Engen in 1998 by buying shares and then offering $465m for the stock it didn’t already own. The Malaysian company later sold a stake in the retailer to a precursor of Pembani, a private-equity firm based in Johannesburg.

Petronas’s communication department wasn’t immediately available to respond.

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