BP Files for New York IPO of Pipeline Assets
September 11 2017 - 11:40AM
Dow Jones News
By Sarah Kent
LONDON -- BP PLC is moving forward with plans to float some of
its vast network of U.S. pipelines in a move that would spin out
cash from the company's infrastructure assets across America.
In a filing with the SEC on Monday, the company's subsidiary BP
Midstream Partners LP said it was planning an initial offering on
the New York Stock Exchange of up to $100 million. BP had flagged
in July that it was considering such a spinoff and said in a news
release Monday it expected the IPO to take place in the fourth
quarter.
The new entity will be structured as a master limited
partnership, or MLP, a tax-advantaged entity that has gained
popularity among pipeline operators and other capital-intensive
companies.
Though MLPs suffered in the oil price downturn as investors
worried about the safety of their steady dividends -- another
characteristic of the MLP structure -- they have proved a
beneficial way for big energy companies to manage their midstream
assets. When Royal Dutch Shell PLC floated its MLP in 2014 it
raised nearly $1 billion. Shell Midstream Partners LP has a current
market valuation of $4.9 billion.
BP Midstream Partners is expected to have a smaller valuation,
said James Milligan, global resource strategist at Olivetree
Securities. Its initial assets include pipelines for crude oil,
refined products and natural gas.
The move comes as BP re-evaluates its portfolio in the wake of a
dramatic slump in oil prices three years ago and as it seeks to
raise cash to pay for continuing costs related to the Deepwater
Horizon blowout in the Gulf of Mexico in 2010. The company wants to
raise as much as $5.5 billion with various divestments this year,
but also has been making acquisitions as it looks to grow
elsewhere.
Write to Sarah Kent at sarah.kent@wsj.com
(END) Dow Jones Newswires
September 11, 2017 11:25 ET (15:25 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
BP (NYSE:BP)
Historical Stock Chart
From Aug 2024 to Sep 2024
BP (NYSE:BP)
Historical Stock Chart
From Sep 2023 to Sep 2024