Shell PLC (LSE:SHEL, NYSE:SHEL) is likely to drum up US$4 billion or less if it sells its renewable power business, that’s according to an analyst at Citi.
A report from Bloomberg on Thursday claimed the oil an gas firm, which in recent years has talked up plans to diversify and invest in renewable as part of an ESG push, was now exploring options for its global renewable power operations.
This review could lead to a partial sale of those business units, Bloomberg reported, citing ‘people familiar with the matter’.
Bloomberg added that Shell had approached a number of international investors to gauge interest, meanwhile, an alternate option could see it separate the renewables into a ‘more independent unit’.
Citi analyst Alastair Syme, in a note, commented: “The purpose would presumably be as a way of de-risking some of the capital exposure in this business, as well as potentially to find a partner who has better competency in renewables development than Shell does.
“In the current market we see a valuation of somewhere below US$4 billion for this business (100% basis).”