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BP to Sell Mine Interests, Buy Back Some Oil Shares

January 03, 1989|From Reuters

LONDON — British Petroleum Co. began 1989 with two important deals today, saying that it agreed to sell its huge mineral interests to the international mining group RTZ Corp. and that it would buy back a large chunk of its own shares from Kuwait.

BP, the world's third-largest oil company and Britain's biggest, said it would sell the mining operations, minus BP Canada Inc., to RTZ for 2.4 billion pounds ($4.4 billion).

By buying back 790 million of its own shares from the Kuwait Investment Office, the oil giant will lower the Kuwait government's controversial stake in BP from 21.6% to 9.9%.

BP said it has agreed to pay Kuwait, a major oil producer and member of the Organization of Petroleum Exporting Countries, 2.47 pounds ($4.50) each for the shares. The deal was valued at about 1.95 billion pounds ($3.56 billion).

The British government last October ordered KIO, the London-based overseas investment arm of the Persian Gulf state, to slash its holding in the British firm to 9.9% within a year. The decision followed a Monopolies and Mergers Commission finding that the size of the shareholding posed a threat to British interests.

On the minerals deal, a BP statement said RTZ would assume responsibility for project financing of $66 million. The announcement followed news last month that both companies were discussing a deal.

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