(Updates to add details about RBS' plans to sell assets)
By Cassandra Sweet
Of DOW JONES NEWSWIRES
SAN FRANCISCO -(Dow Jones)- Sempra Energy (SRE) said Monday that its partner in a commodities joint venture, Royal Bank of Scotland Group Plc (RBS) has said it may have to sell its interest in the enterprise.
"We have been informed by leadership of the Royal Bank of Scotland that RBS may have to divest its interest in the RBS Sempra Commodities joint venture," the company said in a statement.
RBS said Monday it will likely have to sell off more assets than initially thought under negotiations with the E.U. over competition concerns related to the bank's bailout by the U.K. government last year.
The U.K. government is expected to announce plans Tuesday to recapitalize and restructure RBS and Lloyds Banking Group PLC (LYG), a government official said Monday.
In exchange for billions of dollars in aid that RBS and Lloyds received last year, the banks now have to fulfill requirements from the European Commission, which wants to make sure banks that received aid don't have an unfair competitive advantage over those that stayed independent. As a result of the bailouts, the U.K. government owns 70% of RBS and 43% of Lloyds.
Sempra, of San Diego, Calif., said its agreement with RBS requires the bank to keep its ownership of their 50-50 joint venture through April 2012. Any order from the European Commission requiring the bank to sell its share of the commodities unit would likely "allow for an orderly transition," Sempra said. The company added that its agreement with RBS gives the California company the right to buy RBS' share of the joint venture.
"After discussions with RBS, we are confident that RBS is committed to continuing the capital and credit support for the joint venture going forward," Sempra concluded.
Sempra, which owns San Diego electric and natural gas utilities, as well as U.S. natural gas pipelines, storage facilities and liquefied natural gas terminals, said its statement was preceded by a news report that RBS may divest its stake in the commodities joint venture.
Shares of Sempra were recently trading 3.5% lower at $49.66; shares of RBS in New York were trading nearly 9% lower at about $12.43 apiece.
-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com
(Patricia Kowsmann, Laurence Norman and Margot Patrick in London, and Sara Schaefer Munoz in New York contributed to this article)