Buyback speculation as BG disposals raise over pounds 1bn

BG, the former British Gas, is set to raise well over pounds 1bn from its sale of businesses by the middle of the year, far more than previously predicted. As Chris Godsmark, Business Correspondent, reports, the cash raised is likely to fuel speculation of another share buyback later in 1998.

The disposal programme, begun early last year, is understood to have raised considerably more than analysts had originally expected, largely due to BG's moves to sell off its smaller international ventures and overseas exploration and production divisions.

The company now expects to have raised between pounds 1.2bn and pounds 1.3bn from the sales by the middle of this year, compared with a figure of "several hundreds of millions" previously mentioned.

BG's top management, led by David Varney, chief executive, will give more details of the disposals when the group reports its annual results at the end of February.

The news is likely to fuel confidence in BG's prospects since its defeat at the hands of the Monopolies and Mergers Commission (MMC) last summer in its long-running battle over pipeline charges.

In recent months BG shares have risen sharply as industry analysts reappraised its prospects overseas, and as the company concentrated on ploughing investment into larger projects.

Several more deals are understood to be due in the next few months, with contracts in the final stages of negotiation. Last year saw a string of sale agreements, including part of the group's interests in Tunisia.

In November BG unveiled a deal to sell its German businesses to Verbundnetz Gas, a transmission company. The deal, thought to be worth up to pounds 100m, included stakes in a regional gas distribution company and a property and energy services group.

Although BG has privately played down suggestions that it is looking to make a further share buyback, the cash raised is likely to boost the prospects of another payout to investors the end of this year. Last year's capital restructuring handed back pounds 1.3bn to shareholders, around the same figure as the cash raised by the on-going sale of businesses.

However the group is waiting for the outcome of the government's review of utility regulation before committing itself to any investor payout. BG has been vigorously lobbying for changes to the system, to force regulators to implement the MMC's conclusions in full.

Alongside news about asset sales, BG will tell investors next month that it expects to invest about pounds 1.5bn a year in overseas projects. BG's prospects were given a huge boost late last year when the group, along with other oil and gas giants, signed agreements opening up exploration opportunities in Kazakhstan, which has huge unexploited reserves.

BG has a 32.5 per cent stake in a consortium, which includes Agip and Texaco, developing one of the world's largest oil and gas fields in West Kazakhstan. Another consortium, in which BG has a 16.67 per cent share, is developing fields north of the Caspian Sea.

News
Jennifer Lawrence was among the stars allegedly hacked
peopleActress and 100 others on 'master list' after massive hack
Sport
Radamel Falcao
footballManchester United agree loan deal for Monaco striker Falcao
Sport
Louis van Gaal, Radamel Falcao, Arturo Vidal, Mats Hummels and Javier Hernandez
footballFalcao, Hernandez, Welbeck and every deal live as it happens
Sport
footballFeaturing Bart Simpson
PROMOTED VIDEO
News
people'It can last and it's terrifying'
Voices
A man shoots at targets depicting a portrait of Russian President Vladimir Putin, in a shooting range in the center of the western Ukrainian city of Lviv
voicesIt's cowardice to pretend this is anything other than an invasion
News
i100
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
Arts and Entertainment
booksNovelist takes aim at Orwell's rules for writing plain English
Arts and Entertainment
The eyes have it: Kate Bush
music
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Asset Manager

£70000 - £75000 Per Annum: The Green Recruitment Company: Katie Robinson +44 (...

Application Support Analyst / Junior SQL Server DBA

£40000 - £45000 per annum: Ashdown Group: An established professional services...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Business Development Manager / Media Sales Exec

£28 - 32k + Uncapped Commission: Guru Careers: A Business Development Manager ...

Day In a Page

Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor