GE shares spark on plan to hasten Baker stake sale

DALLAS: General Electric Co (GE) jumped as chief executive officer (CEO) Larry Culp accelerated plans to pare the company’s stake in Baker Hughes with a deal that would raise US$4 billion (RM16.68 billion) at current prices.

GE will sell 166.2 million shares in the oilfield-services provider through a secondary offering and a stock repurchase by Baker Hughes, said the companies on Tuesday.

GE will retain about half of the Houston-based company, at least for now.

Culp’s decision punctuates GE’s pivot away from the oilfield businesses that had been championed by former CEO Jeffrey Immelt, who spent US$10 billion on deals in the decade through 2013 and agreed in 2016 to merge GE’s crude-related assets with Baker Hughes.

Culp is raising cash amid mounting pressure on GE to reduce debt, as the company’s shares still languish near a nineyear low and the cost of insuring its bonds against default has jumped.

“We like seeing GE’s new CEO Larry Culp hasten the pace of the company’s portfolio breakup to generate sale proceeds to delever the balance sheet,” said Deane Dray, an analyst at RBC Capital Markets.

“This is consistent with GE’s messaging that it has US$60 billion of potential sources of liquidity.”

GE advanced 7.8 per cent to US$8.61 at the close in New York, the biggest gain in more than four months.