BP: No Plans to Issue Shares to Fund Oil Cleanup

BP PLC said Tuesday it has no plans to issue new shares to help pay for the Gulf of Mexico oil spill, giving its shares a further boost amid rumors of interest from sovereign wealth funds.

BP spokesman Mark Salt said that BP "is always happy to welcome new shareholders or existing shareholders who wish to increase their shareholdings, but there's no current plans to issue new equity to anyone."

The company's statement is good news for investors whose own holdings would be diluted by a larger stock base.

Special Section: Disaster in the Gulf

Recent reports have suggested that a number of Middle East sovereign wealth funds are considering purchasing a stake in BP, helping calm fears of a full takeover. BP declined to comment on "market rumor and speculation."

Shares in the company were trading 2.7 percent higher at 342.35 pence ($5.20) in afternoon trade on the London Stock Exchange.

Many analysts view the stock, which had at one point since the spill lost $100 billion in market value, as oversold.

Royal Bank of Scotland on Tuesday upgraded the stock to "buy" from "hold", setting a target price of 455 pence.

"Our base case scenario is significantly less pessimistic and in our view, the risk/reward profile of the shares is currently favourable," RBS analysts said in a note.

They said that the operation of relief wells, due to occur around the middle of this month, will be a turning point for BP's shares.

"Stopping the flow of oil will cap the physical volume of the spill, reduce the daily costs being incurred, cool the political temperature and, if BP's share price remains excessively depressed, it could trigger credible merger speculation," they said.

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Gulf Coast Deserted for July Fourth Weekend
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Are Deepwater Relief Wells a Guaranteed Fix?
After Rough Weather, Skimmers Back to Work
Model: High Odds of Oil Hitting South Florida
Oil Spill Volunteers Ready, but Many Go Unused
Alex Downgraded, but Hampering Gulf Cleanup

[mtler]

I dont get it, arent halliburton and transocean as well as the US government who failed on their maintenance checks a whopping 30 or so times in a row supposed to be held liable in paying damages aswell? Or is it that they are american companies and organizations and its all aimed to kill the foreign investment in the US. Obama has a huge share of blame with his inaction on the issue with him ignoring about 20 countries who offered their help which would have significantly reduced the damage done, but i guess it wouldnt have hurt BP as much. Way to go in trying to entice foreign companies to invest and open branches in the US if this is how they get treated when something goes wrong. Im actually happy that BP is opening up shop in brazil and libya of all places.