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Morgan Stanley (MS) To Sell Natural Gas Business

Morgan Stanley (NYSE:MS) is said to have consented to sell its compressed natural gas unit. The move follows after the scrutiny of the regulator following its unveiling last year, Reuters reported.

Transfer Of Unit

As a result, Morgan Stanley (NYSE:MS) will transfer the gas unit, Wentworth, to a freshly established firm known as Pentagon Energy LLC. Reports said that two managers of the company, who were part of Wentworth, are also leaving to assume the role of principals in the freshly established company.

However, there is another official, Simon Greenshields, who was the head of the Bank’s commodities unit until January, who is not joining the new company. As Morgan Stanley refused to comment about the matter, financial terms of the agreement were not disclosed or reported. The new company aims to benefit from the low natural gas prices prevailing in North America. It will export the commodity through container ships to Central America, as well as the Caribbean, which are under-served markets.

Reports indicated that there is no clarity whether Morgan Stanley (NYSE:MS) is ready to offer financial facility to the new company, Pentagon Energy. The company is focusing on countries where there is a lack of access to natural gas and expensive oil is used for their plants. The unit might be looking less lucrative now compared to the period of launch. It was primarily due to weakening oil prices worldwide.

Filed An Application

It was in August last year that Morgan Stanley’s plan came to the fore, following the filing of an application with the Energy Department. It was meant to establish, own, and manage compression, as well as a container loading facility in Texas.

Morgan Stanley (NYSE:MS)’s plan got the attention of the Fed, which was inquiring into the bank’s physical commodity operations. The Fed followed with a set of question on Wentworth. The bank’s CEO, James Gorman, reached the Fed and followed it with a disclosure to its staff that the unit had to be sold.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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