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FT: Shell’s asset disposal plans face delay

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By: Carl Surran, SA News Editor: Jun 6, 2016

Royal Dutch Shell’s (RDS.A, RDS.B) $30B asset disposal plan put in place after its takeover of BG Group likely will drag on beyond 2018 if oil prices remain depressed, Financial Times reports.

Shell is planning to sell off a large chunk of its portfolio because the BG deal significantly increases the combined group’s debt load, but people involved in the sale process tell FT that while that timeline is still in place, the deadline could be pushed back if Shell cannot secure what it thinks the assets are worth.

Shell’s sale program “started with grand intentions to refocus the company, but a burgeoning debt pile has now transformed this program into an essential delevering tool,” Citigroup analysts say.

Shell CFO Simon Henry is expected go into further detail about the asset sale plan and the company’s efforts to cut costs at an investor event in London tomorrow.

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