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British Petroleum Company (Government Shareholding)

Volume 886: debated on Friday 21 February 1975

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asked the Secretary of State for Energy whether he is satisfied that the purchase by the Bank of England from Burmah Oil Company Ltd. of its holding in British Petroleum Company is fair to the Burmah shareholders, in view of the fact that the market value has since risen by £100 million; and if he will make a statement.

Yes. The company asked for Government assistance just before Christmas and support operations were announced on 31st December. However, as further information about the company's problems came to light, these support operations had to be modified to meet the company's needs. Outright purchase of the BP shares was an essential feature of the new proposals.The price agreed was the average of stock market prices from 31st December to 22nd January—the day before the transaction was completed—but leaving out of account any day's price below that on 31st December. The Government considered that this arrangement was fair both to the shareholders and to the taxpayer, who is underwriting the bank's guarantees to the company.