Royal Dutch Shell has signed an agreement to divest part of its stake in Australian energy group Woodside Petroleum to equity investors for about $1.7bn (A$2.2bn).
Shell Energy Holdings Australia (SEHAL), a unit of Shell, has agreed with two investment banks to divest 64% of its stake in Woodside by selling 71.6 million shares ata price of A$31.10 per share.
Shell CFO Jessica Uhl said: “This sale is another step towards the completion of our three-year $30bn divestment program, which is an important part of our strategy to reshape Shell, to deliver a world class investment case, and to strengthen our financial framework. Proceeds from the sale will contribute to reducing our net debt.”
Upon completion of the deal, which is scheduled on 14November 2017, SEHAL will have 4.8% interest in Woodside.
Shell said that the remaining stake in Woodside will not be sold by SEHAL for at least 90 days from the completion of the latest sale.
Woodside CEO Peter Coleman was quoted by Reuters as saying: “Woodside will maintain a close working relationship with Shell – as a joint venture partner and customer of Shell technology – and we recognize that Shell will always be part of our history.”
In November 2010, Shell divested 10% of the issued capital of Woodside and retained 24.27% interest in the company.
The remaining interest, however, was further diluted to 23.08% as Shell committed not to participate in Woodside’s dividend re-investment program.
Further 9.5% of Woodside’s issued shares were sold by Shell in June 2014, retaining an interest of 13.58%.
Shell said: "During the second quarter 2016, Shell management concluded that a change in Shell’s level of involvement over Woodside’s financial and operating policy decisions resulted in Shell no longer having significant influence."