 "BP logo is seen at a fuel station of British oil company BP in St. Petersburg")
Castrol, a wholly-owned subsidiary of BP, on Tuesday sold an 8.5-per cent equity stake in Castrol India in a block deal on Tuesday. With this, the second tranche of equity divestment in Castrol India, BP will now hold a 51-per cent stake in the Indian lubricant maker.
“Castrol sold 8.5 per cent shareholding held in Castrol India to a range of domestic and international investors,” UK-based energy giant BP said on Tuesday.
This is the second time Castrol has sold its stake in the Indian arm. In May, it sold a 11.5-per cent stake in the Indian subsidiary for Rs 2,100 crore.
Reiterating its interest in the Indian lubricant maker, BP said it intends to continue as a majority shareholder in Castrol India through Castrol.
Castrol India shares closed 8.79 per cent higher than the previous day at Rs 459.60 per share. Details of the investors who bought the stake were not readily available.
“BP remains the majority shareholder in Castrol India and we remain committed to long-term investment in India, including both progressing natural gas developments with our partners as well as growing our downstream businesses, which include both fuels marketing and lubricants,” said Bob Dudley, chief executive for BP Group.
The company said it does not expect this transaction to impact staff or customers of Castrol India or its existing contracts.
The latter manufactures and markets automotive, industrial and marine lubricants, distributed from over 80,000 retail outlets, and has three manufacturing plants in India.
BP Group is on a divestment drive as it looks to unlock value in some of its global assets. For the quarter ended June, it suffered a loss of $1.4 billion. In the first half of 2016, BP has globally divested assets worth $1.9 billion, including the partial sale of its interest in Castrol India.
“While a promoter selling a stake is usually a negative signal to the market, in this case, it may not necessarily be a red flag. BP has been cutting capital expenditure as well as selling assets with a target of $3-5 Billion in asset sales for 2016 to raise more cash after the oil crash,” Pranoy Kurian, analyst with IDBI Capital wrote in a report on Castrol India, issued on September 1.
