Glencore sells 51% of petroleum storage, logistics business

Glencore has completed the sale of a 51% stake of its petroleum products storage and logistics business for $579m cash, rising to $775m later in the new year once certain assets have been transferred into the new operating company.

Glencore and the new owners of the 51% stake, HNA Innovation Finance Group, have set up the new company, HG Storage International Limited, as announced in March.

A second agreement between Glencore and HNA will see three US assets transferred into HGSI in 2018, subject only to clearance from the Committee on Foreign Investment in the US. Once this is complete, Glencore will receive the remaining $196m of the original purchase price of $775m.

"HGSI intends to expand its global footprint through acquisitions and organic growth supported by its shareholders," Glencore said.

HGSI will be governed by its own board of five directors, with three appointed by HNA, with both sides agreeing an initial three year lock-up period in respect of their interests in the storage business.

In March, Glencore's oil chief Alex Beard said the partnership aimed to further develop the global petroleum products storage and logistics business by bringing together Glencore's market knowledge and expertise in petroleum products storage and with HNA's "global reach and strong position in Asia", with the sector expected to enjoy strong market fundamentals.

"We also look forward to exploring further potential opportunities for cooperation with HNA in areas of mutual interest," Beard said at the time.