Shell assets in play

Basell and two other Shell spin offs may be the next assets to push the leverage envelope. The oil major is looking to sell the businesses in a US$10bn disposal programme to finance a US$45bn capital spending spree. They all have stable cash flows, making them likely candidates for aggressive leverage ratios.

Blackstone and Apollo submitted a joint first round bid for the Basell plastics business, which is expected to sell for up to €4bn. Bain and KKR also placed a joint bid before CSFB and Lazard closed the first round of the auction.

Shell owns Basell in association with BASF. It is also looking to sell its Liquified Petroleum Gas (LPG) division and Inter-Gen, the US-based power generating business. Citigroup is running the LPG auction, with Goldman Sachs and KKR touted as early joint bidders.

Another potential bidder is Candover, which bid last year with JP Morgan Partners’ for ABB’s oil assets. That business had US$2.6bn in sales last year and Ebitda of US$400m. Paribas Affaires Industrielles also has experience in the sector, recently selling a 70% stake in Antargaz, the French gas distributor.

Shell and Esso Nederlands, a division of ExxonMobil, have already announced the sale of transport activities in gas joint venture Gasunie to the Dutch government for E2.78bn.

Under a restructuring agreement, the Dutch State would assume full ownership of Gasunie’s transportation business. However, the Dutch gas company’s merchant business would remain a joint venture between the Dutch State, Shell and US oil major ExxonMobil.