January 18, 2011 / 10:15 PM / 7 years ago

UPDATE 1-Nexen sells 65 pct stake in chemical maker Canexus

* Selling 74.5 million units in Canexus

* Sale to raise C$477.1 mln

* Canexus spun off from Nexen in 2005 (Adds details)

CALGARY, Alberta, Jan 18 (Reuters) - Nexen Inc NXY.TO said on Tuesday it will sell its 65 percent stake in the Canexus Income Fund CUS_u.TO, raising C$477.1 million ($482 million) and ending its association with its former industrial chemicals unit.

Nexen, Canada’s No. 6 independent oil and gas producer, said it will sell its 74.5 million Canexus units for C$6.40 each to a syndicate of underwriters led by Scotia Capital and CIBC World Markets.

Canexus, which makes bleaching agents for the pulp industry, and other industrial chemicals, was spun off into an income fund by Nexen in 2005 as the company looked to cut its debt. The oil producer has long said it would consider selling the stake.

“This business was not core to our operations and the sale of our units allows us to focus our efforts on continuing to generate value for our shareholders,” Marvin Romanow, Nexen’s chief executive, said in a release.

The offer is expected to close around Feb. 7. Romanow and two other Nexen executives will resign from Canexus’s board once the transaction is complete.

Nexen did not specify what it will do with the proceeds of the sale.

Canexus units closed down 16 Canadian cents to C$6.80 on the Toronto Stock Exchange on Tuesday while Nexen rose 30 Canadian cents to C$24.22.

$1=$0.99 Canadian Reporting by Scott Haggett; editing by Rob Wilson

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