British Petroleum (BP.US) sells Castrol's equity repayment for $6 billion, and Stonepeak takes over 65%

The Zhitong Finance App learned that British Petroleum (BP.US) completed a transaction to sell 65% of Castrol's (Castrol) lubricants business to US private equity firm Stonepeak Partners on Monday. After the deal is completed, BP received $6 billion in after-tax revenue, which will be used to reduce debt and strengthen financial strength. BP also retained 35% of Castrol's shares and formed a new joint venture with Stonepeak.

According to reports, BP agreed to sell 65% of the above shares at the end of last year, which is seen as a key milestone in resetting the company's business after years of poor performance. BP is using excess cash to reduce financial burdens, including conventional debt, hybrid bonds, leases, and Deepwater Horizon (Deepwater Horizon) accident settlement payments. The company is also advancing a range of asset disposals to streamline operations and focus investments on core upstream, downstream, and trade operations.

When announcing strong earnings last week, BP said that by the end of the third quarter, net debt had fallen to about US$13.87 billion, thus achieving the net debt target one year ahead of schedule.

BP CEO Meg O'Neill (Meg O'Neill) said in a statement on Monday: “This deal brings significant cash returns to BP today while retaining valuable holdings for Castrol's future growth. Castrol will now have more independence to accelerate the next phase of its development.”

O'Neill became BP's first external CEO in April of this year, and she is preparing to announce the company's long-term strategy in December.

Stonepeak said that with the completion of the deal, Castrol has appointed a new board of directors, with Ben van Beurden (Ben van Beurden), the former CEO of Shell (SHEL.US) and current chairman of Clariant AG (Clariant AG), as chairman. The new board will include four independent directors (including the chairman), three directors associated with Stonepeak, two British Petroleum directors, and a director from the Canadian Pension Plan Investments Board (CPP Investments); CPP Investments will also participate as an indirect minority investor.