Repsol Is Said to Weigh Sale of $4.4 Billion Gas Natural Stake

(Bloomberg) -- Repsol SA is considering options including a potential sale of its $4.4 billion stake in Spanish gas distributor Gas Natural SDG SA, people familiar with the matter said, a move that could help the country’s biggest oil firm raise cash and invest in areas such as renewables.

The deliberations, which are preliminary, include a partial or full sale of the 20 percent stake in Gas Natural to one or several investment funds, the people said, asking not to be identified as the matter is private. No final decisions have been made, and Repsol may also decide to retain the stake, the people said.

Representatives for Gas Natural and Repsol declined to comment. Gas Natural shares closed at 18.64 euros in Madrid on Friday, giving the company a market value of 18.65 billion euros.

A stake sale by the Spanish oil firm would follow a similar move last year, when Repsol and Criteria Caixa each sold 10 percent stakes in the natural gas distributor for 19 euros a share to Canadian fund Global Infrastructure Partners for $4.3 billion. Repsol Chief Financial Officer Miguel Martinez has said the stake in Gas Natural provides an “optionality” to raise cash and potentially invest in areas such as renewable energy.

Repsol, which last month reported third-quarter earnings that beat analyst’s estimates, has reduced its debt to about 7 billion euros as of the end of September from almost 10 billion euros a year earlier. Standard & Poor’s upgraded the company’s credit ratings, citing strong cash flow generation and debt reduction efforts.

©2017 Bloomberg L.P.