BP, the oil and gas giant capitalised at £62 billion ($122 billion) on the London Stock Exchange, is hunting for ways to cure its $US24 billion ($37 billion) debt load. And its executives have decided its Australian renewables portfolio offers a small, but easy, fix.
Street Talk can reveal BP has hired Bank of America to shop a 51 per cent stake in the Australian assets of Lightsource BP, a developer and operator of utility-scale solar and battery storage assets with a 62GW pipeline across 19 global markets.
The mooted sale comes three weeks after BP completed a £400 million acquisition of a 50.1 stake in Lightsource BP to become its sole owner.
Sources said BP wants to deconsolidate the debt attached to Lightsource BP’s Australian projects; selling a majority stake in the portfolio would wipe 100 per cent of Lightsource’s debt off its balance sheet.
The up-for-grabs portfolio has several solar assets and BESS projects, including the 350-megawatt Lower Wonga in Queensland, the 585MW Goulburn River in NSW’s Upper Hunter region, and the 400MW Gundary solar also in NSW.
Of course, the auction is far from Lightsource BP’s first rodeo on the Aussie M&A scene. Over the years, it has raised hundreds of millions in debt financing for its projects, run processes to select offtake partners and – perhaps most notably – sold 1GW worth of solar farms and battery storage via Macquarie Capital last year.
That portfolio, bought by Rothschild-advised Beijing Energy International Australia, included three solar farms totalling 521MW that are already up and running: Wellington (200MW) and West Wyalong (107MW) in NSW, and Woolooga (214MW) in Queensland. All three have co-located batteries under development that would aim to provide two to four hours of storage.
Well-timed
BP has reduced its net debt from nearly $US45 billion in 2019 to $US24 billion, but is still more leveraged compared with listed peers like Shell and TotalEnergies. Credit rating agency S&P downgraded BP’s credit outlook to “stable” from “positive” in June, despite maintaining the A- rating. “BP’s updated cash allocation strategy is less likely to result in meaningful further absolute debt reduction,” it said.
Still, the timing of the oil major’s Australian plans may be opportune. Renewables activity has started to ramp up again, following a lull induced by lower valuations and rising construction costs. HMC Capital and Iberdrola are battling for Neoen’s Victorian portfolio, while Italy’s Enel has picked up DIF Capital Partners’ $800 million portfolio.
Extracted in full from: https://www.afr.com/street-talk/british-oil-and-gas-giant-bp-shops-51pc-stake-in-aussie-renewables-20241106-p5kocg
