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BP files for IPO of U.S. Midwest, Gulf Coast pipeline assets

Reuters 

By Aparajita Saxena

(Reuters) - British energy company on Monday filed for an initial public offering of its U.S. Midwest and Coast pipeline assets.

LP, the master limited partnership (MLP) formed by BP's U.S. pipeline unit, plans to list on the New York Stock Exchange under the symbol "BPMP," it said in a filing with the U.S. Securities and Exchange Commission.

The offering comes nearly two months after outlined plans to spin off some of its U.S. pipeline assets in an to raise cash.

The revives a plan first broached internally about five years ago before slumping crude oil prices caused to put the idea on hold, a source told in July.

Other energy companies that have spun off their pipeline assets include Royal Dutch Shell - which in 2014 raised nearly $1 billion in the largest MLP listing to date - and refiners such as Valero Energy Corp , Tesoro Corp and Marathon Petroleum Corp .

An MLP is a tax-advantaged structure often used by pipelines and other capital intensive companies to distribute excess cash to investors in the form of tax-deferred dividends. Most MLPs rely on external debt to fund new projects.

Rising interest rates have made borrowing costlier for MLPs, weighing on their performance in recent months despite stabilizing oil prices.

The Alerian MLP ETF has fallen 11.8 percent this year.

"BP's rationale for an MLP structure is basically to attract more investors," Raymond James analyst Muhammed Ghulam said.

BP's U.S. pipeline business includes a network of 3,500 miles (5,633 kilometres) of pipelines and terminal facilities that transport and store more than 1.3 million barrels per day of oil, refined products and natural gas. In addition to the Coast and Midwest assets, operates pipelines in the Pacific Northwest.

Citigroup, Goldman Sachs, Morgan Stanley, Barclays, Credit Suisse and JPMorgan are among the underwriters for Partners'

said it intends to raise up to $100 million in the

The amount of money a company says it plans to raise in its first filings is used to calculate registration fees. The final size of the could be different.

(Reporting By Aparajita Saxena in Bengaluru; Editing by Sai Sachin Ravikumar)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, September 11 2017. 23:51 IST
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