Royal Dutch Shell (LON:RDSA) has inked a deal to sell part of its stake in Australian oil group Woodside Petroleum, the Anglo-Dutch company has said. The move comes as the FTSE 100 energy major continues with its asset disposals in an effort to shore up its balance sheet in the wake of BG Group’s acquisition.
Shell’s share price has jumped in London in today’s session, having added 1.24 percent to 2,448.00p as of 10:10 GMT, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.20 percent higher at 7,447.49 points. The group’s shares have added more than a quarter to their value over the past year, and are up by just under 10 percent in the year-to-date.
Woodside stake sale
Shell announced in a statement this morning that it had agreed to sell part of its stake in Woodside Petroleum to equity investors. The FTSE 100 group has agreed to sell 71.6 million shares in the Australian company, representing 64 percent of its interest in Woodside and 8.5 percent of the company’s issued capital, resulting in total pre-tax proceeds of approximately $1.7 billion. The sale is expected to complete tomorrow.
Upon completion of the sale, Shell will retain a 4.8-percent interest in Woodside, and has agreed not to dispose of any of its remaining shares for a minimum of 90 days.
Divestment programme continues
“This sale is another step towards the completion of our three-year $30 billion divestment programme, which is an important part of our strategy to reshape Shell,” the group’s chief financial officer Jessica Uhl commented in the statement, adding that it will use the proceeds from the sale to bring down net debt.
Today’s sale comes after Shell recently updated investors on its third-quarter performance, posting a rise in profits on the back of better crude prices and strong performance in its refining business.