10-19-2007, 04:29 PM
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Buffett sells PetroChina stake
Quote:
Buffett sells PetroChina stake
By Richard McGregor in Beijing
Published: October 19 2007 04:55 | Last updated: October 19 2007 11:20
Warren Buffett has sold the last of his shares in PetroChina, the Chinese state-owned oil company, but brushed aside suggestions that the sale was in response to a disinvestment campaign over its parent company’s ties to Sudan.
In an interview with Fox Business Network, Mr Buffett said the sale was “based on price”, while admitting that he may have sold a little too early because of recent strong gains in PetroChina’s share price.
He said the stock price had more than doubled in the US since a shareholder meeting earlier this year voted down a proposal for Mr Buffett’s Berkshire Hathaway insurance and investment company to divest from the stock.
Mr Buffett has been selling down his stake since July, reducing Berkshire Hathaway’s holding in PetroChina’s free-float from 11.05 per cent in a series of divestments.
China National Petroleum Corp, PetroChina’s state-owned parent company and the country’s largest oil and gas enterprise, owns the largest single share in the consortium that dominates Sudan’s oil industry, in partnership with other foreign investors, from India and Malaysia.
The Darfur coalition has targeted China because it believes Beijing’s financial support for Khartoum, combined with its position as a permanent member of the UN Security Council, have been pivotal in diluting international pressure over the Darfur issue.
Fidelity, the world’s largest mutual funds company, announced in a filing in the US in May that it had sold 91 per cent of its American Depositary Receipts in PetroChina in the first quarter of this year.
Fidelity, which at the time still held significant numbers of shares in PetroChina’s Hong Kong-listed vehicle, denied the sale was in response to the Darfur campaign.
The Save Darfur Coalition has urged investors such as Fidelity, Vanguard and American Funds to sell their PetroChina stakes. PetroChina declined to comment yesterday.
Mr Buffett said that although he had “unfortunately” sold early, “it was 100 per cent a decision based on valuation”.
“We made about $3.5bn on a about a $500m investment. I still sold too soon as it turned out”, as since then the price has shot up.
Berkshire paid $488m for the stake in PetroChina, which according to the company’s annual report was valued at $3.3bn at the end of 2006.
The disinvestment campaign has had no discernable negative impact on PetroChina’s share price, which has risen sharply in both Hong Kong and New York, where it is listed.
“The growth in PetroChina’s valuation has been driven, in part by news of a traditional kind about production and reserves,” said PFC Energy, a consultancy. “The other key driver has been the boom in China’s asset markets.”
Mr Buffett was the largest foreign portfolio investor in PetroChina.
Copyright The Financial Times Limited 2007
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http://www.ft.com/cms/s/0/7613bb9a-7...nclick_check=1
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