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Repsol consults banks over 4.4 billion euro Gas Natural stake

Miles Johnson
Angel Navarrete | Bloomberg | Getty Images

Repsol has sounded out banking advisers about the sale of its €4.4bn stake in Gas Natural, in the latest move by a Spanish company to sell shareholdings in the country's other major listed groups.

Oil company Repsol had asked Citigroup and Deutsche Bank to explore options for its 30 per cent holding in Gas Natural, people familiar with the situation said.

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While Repsol has not made a final decision on whether it will sell or not, the news suggests that its management now views the stake as having less strategic importance, following the sale of its liquefied natural gas businesses to Royal Dutch Shell in February. Repsol declined to comment.

The possible offloading of Repsol's Gas Natural stake comes as the network of cross shareholdings between Spain's largest companies continues to unravel – driven primarily by the nationalisation of the country's savings banks, which forced them to sell assets.

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Bankia, the largest of Spain's nationalised lenders, has sold its stake in International Airlines Group, the parent company of Spanish airline Iberia and British Airways, and is working on selling other stakes in Iberdrola and Indra.

Repsol is under no financial pressure to sell its shares in Gas Natural, but its management has been considering whether freeing cash to invest more in upstream oil exploration – the focus of its growth plans – would be a more effective use of resources.

While the oil company has been addressing this issue in-house and has not yet signed a formal mandate with investment banks for a sale of its Gas Natural stake, people familiar with the process said it has been working with Citi and Deutsche Bank to assess its options, and the level of market interest in its stake.

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Repsol controls Gas Natural alongside the Barcelona-based savings bank La Caixa, which is the company's second-biggest shareholder, and the two investors have a shareholders' agreement to collaborate. La Caixa, through its banking arm Caixabank, is also the largest shareholder of Repsol.

Antonio Brufau, Repsol's executive chairman, and Isidro Fainé, president of the Catalan bank, recently disagreed over a strategy for winning compensation from the government of Argentina, which last year expropriated Repsol's YPF unit.

However, people close to La Caixa said they were comfortable with Repsol's actions over the Gas Natural holding and that the companies continued to enjoy good relations.

Repsol has long considered the possibility of selling its stake in Gas Natural, which had often been criticised by analysts for lacking a clear industrial logic. But the expropriation of YPF delayed any decision about the holding, as Repsol's management moved to stabilise the company through measures such as the sale of its LNG division earlier in the year.

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