• 4 minutes Pompeo: Aramco Attacks Are An "Act Of War" By Iran
  • 7 minutes Who Really Benefits From The "Iran Attacked Saudi Arabia" Narrative?
  • 11 minutes Trump Will Win In 2020
  • 15 minutes Experts review Saudi damage photos. Say Said is need to do a lot of explaining.
  • 13 mins Ethanol is the SAVIOR of the Oil Industry, Convenience Store Industry, Automotive Supply Chain Industry and Much More!
  • 16 hours Saudi State-of-Art Defense System looking the wrong way. MBS must fire Defense Minister. Oh, MBS is Defense Minister. Forget about it.
  • 10 hours Let's shut down dissent like The Conversation in Australia
  • 6 hours One of the fire satellite pictures showed what look like the fire hit outside the main oil complex. Like it hit storage or pipeline facility. Not big deal.
  • 2 hours Instagram Now Banning Photos Of People At Gun Ranges, Claiming They Promote "Violence"
  • 3 hours Ethanol, the Perfect Home Remedy for A Saudi Oil Fever
  • 1 day Saudis Buying Oil From Iraq
  • 6 hours Trump Accidentally Discusses Technology Used In The Border Wall
  • 16 hours Hong Kong protesters appeal to Trump for support.
  • 4 hours Famous Manufacturer of Anti-Ethanol Additives Proves Ethanol's Safety and Benefits
  • 9 hours Collateral Damage: Saudi Disruption Leaves Canada's Biggest Refinery Vulnerable
  • 1 day Donald Trump Proposes Harnessing Liberal Tears To Provide Clean Energy
  • 1 day Saudis Confirm a Cruise Missile from Iranian Origin

GE Cuts Baker Hughes Stake Below 50%

BHGE

GE will sell more shares in Baker Hughes, which it acquired in 2017, and this will reduce its stake in the oilfield services provider below 50 percent, the company said in a statement.

The parent company will offer some 105 million shares to potential buyers with an option for an additional placing of 15.75 million shares. According to Reuters, the sale could fetch as much as $3 billion.

At the same time, Baker Hughes will repurchase stock worth some $250 million in a private deal with GE.

Bloomberg notes the deal will be painful for GE. Baker Hughes’ stock closed at $24.11 apiece yesterday. That’s down from over $50 per share in the year when GE acquired the company. Two months ago, GE estimated it would have to book a writedown of $7.4 billion on the Baker Hughes acquisition. The $3 billion expected to be raised via the share sale would help the company reduce the losses but not completely offset them.

GE recently saw its own stock take a plunge, after a report from notorious whistleblower Harry Markopolos accused the conglomerate of accounting fraud on a scale similar to the Enron scandal.

The report concerned, among other things, GE’s approach to the accounting needs of Baker Hughes. What’s more, it came on the heels of a lawsuit related to the merger of Baker Hughes into GE’s own oil and gas business, which cost almost $8 billion and gave GE a stake of 62.5 percent in the oilfield services company. As a result of the accounting fraud, according to the Markopolos report, GE was “on the verge of insolvency.”

However, it turned out the report was commissioned by an unnamed entity that had interest in GE’s stock declining. For now, GE appears to be still standing, even if it is cutting its control of Baker Hughes.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play