The Royal Dutch/Shell Group is selling nearly a quarter of its Malaysian unit in a placement on Thursday to raise up to 468 million ringgit ($123 million), dealers said.
Shell, which is struggling to improve a reputation damaged by overbooking of oil reserves, recently announced plans to sell under-performing assets in the US and Peru in a revamp aimed at boosting profits.
Shell is offering 72 million Shell Refining shares at prices between 6.20 ringgit and 6.50 ringgit each, one of the dealers told Reuters.
The offer would be a discount of between 3.7 percent and 8.1 percent to Shell Refining's closing price of 6.75 ringgit on Wednesday.
Top merchant bank CIMB Bhd is currently asking bids for the shares, dealers said. CIMB's chief executive Nazir Razak declined comment when contacted.
The placement would cut Shell's stake in the Malaysian unit, which it holds through Shell Overseas Holdings Ltd, to 51 percent from 75 percent currently.
"We cannot comment at this point in time," a Shell Overseas official told Reuters.
Shell Refining, which made profits of 182.2 million ringgit last year, operates a 156,000 barrels per day refinery in Port Dickson in the south-western state of Negeri Sembilan. It produces about 100,000 tonnes per year of propylene, a basic building block for the chemical industry.
Shares of Shell Refining were traded unchanged at 6.75 ringgit at 0403 GMT.