Repsol urged to sell more assets or cut dividend; options include core refining, downstream or petrol stations businesses
Rating agencies are urging Repsol [BME:REP] to put more assets up for sale, Cinco Dias reported. Repsol has already announced EUR 2.9bn in provisions for 2015 to compensate for falling oil prices, which drove the accounts to a EUR 1.2bn loss last year. Net adjusted results improved by 8% to EUR 1.85bn, the Spanish-language paper noted.
Rating agencies are watching oil companies closely. Standard & Poor’s has given Repsol bonds a BBB– rating, while Fitch puts it at BBB and Moody’s at Baa2. Analysts believe Repsol must make new divestitures or change its dividend policy in order to maintain its rating at investment levels, the report said.
Among the options, analysts include a stake sale of Gas Natural Fenosa, where Repsol holds 30%. The investment is considered strategic and valued at EUR 5.3bn at market prices. Market sources told Cinco Dias that a partial or total sale of the Gas Natural Fenosa would be positive for Repsol.
Other asset sale options include Repsol’s core activities, such as refining, downstream, or petrol stations. Reducing or removing dividend would also be an obvious step forward, one of the sources was quoted as saying.
This year the dividend will be charged against cashflow, as the company recorded losses in 2015. Repsol noted last week that it had reduced its debt by more than EUR 1bn compared to 2014, the report said, and it remains committed to pay EUR 1 per share.
Cinco Dias