US industrial group General Electric (GE) said on Tuesday it was selling a part of its stake in oilfield services provider Baker Hughes, its latest move to raise cash and repay debt.
GE, which bought Baker Hughes in July 2017, has been selling off assets and cutting costs to reduce debt and focus on its core businesses of jet engines, power plants and renewable energy.
The Baker Hughes transaction came a day after GE CEO Larry Culp said the company would sell assets with “urgency” to reduce its high debt.
“Earlier this year, we announced our intent to pursue an orderly separation from Baker Hughes,” Culp said. “The agreements announced today accelerate that plan in a manner that mutually benefits both companies and their shareholders.”
GE said in June it would sell its stake in Baker Hughes over the next two to three years.
The stake sale comes at a time when Baker Hughes is starting to see the benefits of an improving oil market, which helped it post a third-quarter adjusted profit in October.
The company had also said it was optimistic about the near future. Oil prices hit highs of about $85 a barrel earlier in 2018 and production in North America has risen to record levels.
As part of the deal, Baker Hughes will buy back another part of GE’s stake. GE, which owns 62.2% of the company, will have the option to sell more Baker Hughes shares after a 180-day lock-up period ends.
The transactions were expected to maintain GE’s stake in Baker Hughes above 50%, the companies said in a statement.
Reuters
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