---
title: "Thebe in dispute with departing Shell over value of its stake — matter in arbitration"
description: "Thebe Investment Corporation has confirmed that it is in a dispute with Shell over the value of its 28% stake in Shell Downstream South Africa (SDSA) and the matter has gone to arbitration. This comes in the wake of the oil giant’s announcement that it is divesting from SDSA."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "VALUATION WRANGLE"
author: "Ed Stoddard"
author_url: "https://www.dailymaverick.co.za/author/ed-stoddard/"
canonical_url: "https://www.dailymaverick.co.za/article/2024-05-08-thebe-in-dispute-with-departing-shell-over-value-of-its-stake-matter-in-arbitration/"
published: "2024-05-08T19:50:09"
lang: "en-ZA"
word_count: 537
---

# Thebe in dispute with departing Shell over value of its stake — matter in arbitration

> Thebe Investment Corporation has confirmed that it is in a dispute with Shell over the value of its 28% stake in Shell Downstream South Africa (SDSA) and the matter has gone to arbitration. This comes in the wake of the oil giant’s announcement that it is divesting from SDSA.

By Ed Stoddard · Published 8 May 2024, 21:50 SAST

## Key points
- Thebe Investment Corporation and Shell are embroiled in a tussle over the valuation of Thebe's stake in Shell Downstream South Africa, with Thebe asserting its valuation method as correct and initiating arbitration proceedings, as Shell plans to divest its South African operations.
- Thebe Investment Corporation confirms dispute with Shell over valuation of Shell Downstream South Africa shareholding, refers matter to arbitration.
- Thebe values its stake at $200-million, while Shell plans to divest its downstream South African operations.
- Shell to exit SDSA operations, focusing on EV charging offerings while South Africa's slow EV adoption may explain departure.
- Thebe denies strained relationship with Shell, citing delayed sale transaction as reason for valuation dispute.

## Content

Thebe Investment Corporation (Thebe) confirmed in a statement on Wednesday weekend media reports that it was at loggerheads with Shell over the value of its Shell Downstream South Africa (SDSA) shareholding.

“A dispute has arisen between Thebe and Shell as to how Thebe’s shares should be valued.

“Thebe believes firmly that its approach is the correct one, and that it is consistent with the agreed valuation formula,” says the statement, sent in response to *Daily Maverick* queries days ago.

“Since April 2023, Thebe and Shell have held several meetings to try and resolve their valuation differences. These meetings have not been fruitful, and to resolve the impasse Thebe has referred this matter to arbitration in terms of the provisions of the shareholders agreement. This process is underway.”

The *Sunday Times* reported that Thebe values its stake at $200-million, but Thebe made no mention of the figures that are being contested.

Shell confirmed earlier this week its intention to divest its downstream South African operations – effectively its more than 700 forecourts – after a comprehensive global review of such assets which it flagged in March.

**Read more in Daily Maverick:**[Shell confirms intention to divest from South African downstream operations](https://www.dailymaverick.co.za/article/2024-05-06-shell-confirms-intention-to-divest-from-south-african-downstream-operations/?dm_source=top_reads_block&dm_medium=top_reads_link&dm_campaign=maverick_news)

“During the divestment process, we will work to preserve Shell Downstream South Africa’s operating capabilities, maintain the Shell brand presence, and secure the best possible outcome for our people and customers in South Africa under new ownership,” Shell said.

It made no mention of its exploration or production activities in South Africa, which have drawn the ire of conservationists.

Thebe is tied to the ANC and its relationship as a BEE partner with Shell has been seen by critics as a way for the oil company to score points with the ruling party.

**Read more in Daily Maverick:**[After the Bell: The case in favour of Shell leaving SA](https://www.dailymaverick.co.za/article/2024-05-07-after-the-bell-the-case-in-favour-of-shell-leaving-sa/?dm_source=top_reads_block&dm_medium=top_reads_link&dm_campaign=south_africa)

Shell said in its statement on Monday that its decision to exit from SDSA was not “taken lightly” – with that kind of political baggage, that is probably the case. But it also makes business sense as Shell pivots to EV charging offerings and the pickings on that front in South Africa are slim.

**Read more in Daily Maverick:**[After the Bell: Does SA’s slow embrace of EVs explain Shell’s departure?](https://www.dailymaverick.co.za/article/2024-05-06-after-the-bell-does-sas-slow-embrace-of-evs-explain-shells-departure/)

Thebe for its part denied implications in the local press that the divestment stemmed from a “strained relationship” between itself and Shell.

In its statement on Wednesday, Thebe said its SDSA stake “was acquired through a combination of debt funding and use of Thebe’s own cash resources. As is typical in transactions of this nature, Thebe had a put option, exercisable at its election, to exit its investment by selling its shares back to Shell at a predetermined valuation formula.”

It went on to say that its board decided to exit that stake two years ago but “... Shell delayed the conclusion of the sale transaction”.

This, it seems, has given rise to the punch-up over the value of the stake, a matter that Shell has yet to comment on.

It all provides some illuminating background for any company interested in buying Shell’s downstream assets in South Africa, which may prove to be an upstream paddle. **DM**