IBEX 35 Index Slumped 1% on 12th December, Repsol Sells 25% Stake in Upstream Unit to EIG
14 Dec 2022
IBEX 35 slumped 0.79% at 7,976.70 on Wednesday.
Repsol is going to sell a 25% stake in its demanding oil and gas business to U.S investment group EIG, unlocking capital for greener energy
Repsol’s total market capitalization closed under $19 billion on Monday, Repsol is the largest producer of natural gas, which is around 70% of its daily output of 570,000 barrels of oil equivalent.
Natural gas prices squeeze after Russia’s invasion of Ukraine and the west’s response in the form of sanctions, Repsol planning to keep a majority stake in the business. Repsol will appoint an eight-person board, including the chairman, and four directors. EIG will plan to appoint two board members and two independent directors.
Repsol said it will receive $4.8 billion for the stake, now the upstream market capitalization is $19 billion. The sale of the stake is the first part of a strategy under which Repsol aims to reduce its carbon emissions to zero by 2050, it will take distance from its traditional hydrocarbons business. The strategy expects a possible listing in the U.S in 2026, subject to market conditions
Repsol CEO Josu Jon Imaz said this strategy will help reduce carbon emissions by 2050 and it boost the transformation of the company and its multi-energy profile.
Repsol stock was down 1.2% in Madrid, underperforming both the Spanish benchmark European Oil and Gas peers and IBEX 35 by 4:00 ET (8:00 GMT)
On technical fronts, the IBEX 35 Index; RSI stood at 59.277, and currently, it is trading above all SMA. So, the BUY position can be taken with the following target and stop-loss: