better debt stemming from the purchase of Canadian Oil Sands
Ltd. will probably lead Suncor strength Inc. to divest some non-center
belongings, but if oil prices remain depressed, its retail fuel enterprise will
also be placed up for sale.
The $6.sixty seven-billion takeover includes $2.4 billion of
debt, at the same time as on the same time giving Suncor a
protracted-existence, low-decline asset at some stage in a commodity cycle
trough.
As Arthur Grayfer at CIBC world Markets factors out, the
Canadian strength massive’s sturdy song report gives the capability for
improved profitability on the Syncrude oil sands joint project.
The analyst likes the acquisition no matter noting that
“Suncor essentially obtained debt and little unfastened cash float.”
He doesn’t anticipate that Suncor will cut its dividend,
suggesting that it's going to instead select to promote non-center assets whose
values are less impacted by using present day oil prices. some possible
applicants are its renewables enterprise (six wind farms), pipeline belongings
and thirteen main delicate product terminals.
If oil costs continue to be decrease for longer, Grayfer
thinks Suncor may divest its retail commercial enterprise, which incorporates
about 1,500 Petro-Canada fuel stations.
The analyst estimates the corporation will goal somewhere
between more or less $1 billion and $2 billion in asset income in 2016. He
believes the retail commercial enterprise is really worth near $3 billion.
