Yahoo Finance Shell (RDS.A) Calls off Demark Refinery Unit Divestment Deal
Royal Dutch Shell plc RDS.A has decided not to proceed with the $80 million deal to offload its refinery operations in Denmark. The company had signed the divestment deal with Dansk Olieselskab AS in September 2016, which included the sale of Shell’s Fredericia refinery and local trading and supply activities.
The deal was set for closure by the end of 2017, subject to satisfactory conditions. However, the deal was called off as Shell and Dansk Olieselskab could not reach a consensus regarding matters of sales within the stipulated time. As of now, Shell is not looking for other prospective buyers and intends to retain its refinery operations in Denmark.
The divestment was part of the company’s move to lower its debt arising from the $50 billion mega acquisition of BG Group. It was part of its portfolio optimization strategy and the $30-billion global divestment program set for the 2016-2018 period. The move was also in line with the company's aim to upgrade and streamline its portfolio.
However, with Shell already closing more than $23 billion divestment deals, it remains on track to meet its target by 2018. Further, the company announced asset disposals worth around $2 billion and additional $5 billion divestment deals are already in advanced stages of talks for prospective transactions.
Reaffirming its priorities to curb costs and cut debts, Shell, which ended the third quarter of 2017 with a debt-to-capital ratio of 25.4%, now aims to reduce the leverage to 20% on the back of operational efficiency and divestment spree.
Zacks Rank and Key Picks
Headquartered in the Netherlands, Shell is one of the largest integrated energy companies engaged in production, refining, distribution and marketing of oil and natural gas. The company carries a Zacks Rank #3 (Hold).
Royal Dutch Shell PLC Price
Royal Dutch Shell PLC Price | Royal Dutch Shell PLC Quote
A few better-ranked players in the same industry are Statoil ASA STO, ENI S.p.A. E and PetroChina Company Limited PTR. While Statoil and Eni sport a Zacks Rank #1 (Strong Buy), PetroChina carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Last quarter, Statoil delivered a positive earnings surprise of 13.64%.
Eni came up with an average beat of 147.35% in the trailing four quarters.
PetroChina pulled off an average positive earnings surprise of 27.44% in the trailing four quarters.
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