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Spain’s energy major Repsol and investment company Criteria Caixa have agreed to sell a 20-percent stake in utility Gas Natural for a total of US$4.27 billion (3.8 bln euro). The buyer is U.S. fund Global Infrastructure Partners (GIP).
Each of the two sellers will divest from a 10-percent holding in the utility, with Repsol retaining 20 percent in Gas Natural, and Criteria Caixa keeping a 24-percent interest in it. For the oil company, the deal will bring in a capital gain of US$276 million (246 mln euro), which is welcome news for the debt-laden Repsol, which has a debt pile of US$13.14 (11.7 bln euro) to deal with amid the oil price slump and no prospects of price improvements anytime soon.
Criteria Caixa will book a gain of US$245 million (218 mln euro) and be capable of improving its core capital ratio by 1.65 percentage points, which should calm investors and the government after both Criteria and its bank Caixabank did worse than the average in the latest European bank stress tests.
Currently, Repsol, Criteria, and GIP are discussing corporate governance issues, as the 20-percent stake sale will effectively be the end of the joint control Repsol and Criteria have exercised over Gas Natural since 2000.
Talk about a possible divestment by Repsol and Criteria Caixa first emerged at the beginning of this month, with GIP named among three prospective suitors. At the time, a Bloomberg analyst noted a stake sale to the investment fund or any other one of the bidders would be positive news for Gas Natural as it would mean the buyer will retain the stake rather than “dump it straight onto the market”.
Gas Natural has a market value of around US$21 billion, according to Bloomberg, as of September 1. The company has been troubled by the persistently low gas prices, but earlier this year said it would make sure as much as 70 percent of its income went for dividend payments over the next four years.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.