Gunvor Is Said to Discuss Possible Sale to Algeria’s Sonatrach

ALGIER (Capital Markets in Africa) – Gunvor Ltd., the commodity trading house controlled by billionaire Torbjorn Tornqvist, has discussed selling the company to Algeria’s state oil and gas producer, according to people with knowledge of the situation.

The idea is preliminary but Sonatrach has started due diligence on acquiring all or part of the company, one of the people said, asking not to be identified discussing private negotiations. A second plan under consideration would see Sonatrach, responsible for selling Algeria’s oil and gas exports, start a trading venture with Gunvor, they said. There’s no guarantee either deal will come to fruition.

Gunvor declined to comment. Sonatrach couldn’t immediately be reached for comment.

Last year, Sonatrach started looking for an oil-trading partner and considered a range of companies including Glencore Plc, Vitol Group and BP Plc as well as Gunvor, a person familiar with the matter said at the time.

Gunvor’s oil business has struggled amid shifts in the market that robbed traders of opportunities to make profits by storing oil to sell later at higher prices. The closely held trading house restructured last year, cutting costs and jobs including its head of market research and human resources.

Gunvor, founded in 2000 by Tornqvist, 65, and Russian oligarch Gennady Timchenko, had grown rapidly in the past decade to handle about 2.7 million barrels of crude oil and petroleum products a day. It owns refineries in Germany, the Netherlands and Belgium.

Timchenko sold out to Tornqvist in 2014 after the Russian was named in U.S. sanctions against businessmen close to President Vladimir Putin.

Tornqvist, who holds 64 percent of the firm, initiated talks with rival houses in 2016 about selling a stake in Gunvor. The approaches were described by people familiar with the matter as informal and preliminary and didn’t lead to any deal.

In an interview in October, Tornqvist said he wasn’t looking to sell down his stake but would always keep his options open.

Source: Bloomberg Business News