BP Plc has agreed to sell a 25% non-controlling stake in BP Pipelines (BP TANAP) to Apollo-managed funds for approximately $1 billion. This deal marks BP's first divestment under its new turnaround plan, aimed at improving cash flows through $20 billion worth of divestments by 2027.
Key Highlights:
1. TANAP Pipeline: BP TANAP holds a 12% interest in the Trans-Anatolian natural gas pipeline, part of the Southern Gas Corridor pipeline system.
2. Deal Closure: The transaction is expected to close in the second quarter, subject to regulatory and TANAP shareholder approvals.
3. Divestment Program: Proceeds from the deal will contribute to BP's $20 billion divestment program, aimed at improving cash flows and reducing debt.
4. Strategic Reset: BP's new strategy focuses on fossil fuels, reversing its previous shift toward renewable energy.
5. Castrol Lubricants Business: BP is reviewing the potential sale of its Castrol lubricants business, which could be worth up to $10 billion.
The deal is seen as a significant step in BP's turnaround plan, which has received a lukewarm response from investors. The company's shares fell on the day of the strategy announcement, and activist investor Elliott Investment Management has expressed concerns about the lack of urgency and ambition in the plan.
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