BP Sells Mining Units, Plans Stock Buyback
British Petroleum Co. began 1989 with two major deals Tuesday, saying it agreed to sell its huge mineral interests to the international mining group RTZ Corp. and 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 $4.4 billion or 2.4 billion pounds.
By buying back 790 million of its own shares from the Kuwait Investment Office, BP will lower the Kuwait government’s stake in BP to 9.9% from 21.6%.
BP said it had agreed to pay Kuwait, a major oil producer and member of the Organization of Petroleum Exporting Countries, $4.50 (2.47 pounds) each for the shares. The deal was valued at about $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.
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.