UPDATE 1-Suncor begins auction of lubricants business -sources

(Adds Suncor, Bank of America declining comment, paragraph 4)
By Mike Stone
June 16 (Reuters) - Suncor Energy Inc SU.TO has launched
an auction of its Petro-Canada lubricants division, whose white
mineral oils are sprayed on gummy bear candy to make it shiny
and prevent sticking, people familiar with the matter said.
The sale could fetch around $800 million and help Canada's
biggest energy company pay down debt incurred by recent
acquisitions, the sources said this week.
Calgary, Alberta-based Suncor, which merged with
Petro-Canada in 2009, is working with Bank of America Corp (NYSE:BAC)
BAC.N on the sale process, said the sources, asking not to be
identified because the matter is confidential.
Representatives for Suncor and Bank of America declined to
comment.
Petro-Canada is the world's largest manufacturer of white
mineral oil, which is used in health and beauty products,
pharmaceuticals, adhesives, plastics and elastomers.
Suncor has been acquiring companies during the two-year
slump in oil prices. It spent C$4.24 billion ($3.32 billion) to
purchase Canadian Oil Sands in March. In April, it agreed to pay
about C$937 million to buy an additional 5 percent stake in its
Syncrude oil sands joint venture from Murphy Oil (NYSE:MUR) Corp's MUR.N
Canadian unit.
Petro-Canada purchased its lubricants business in 1985 from
Gulf Canada. The unit, based in Mississauga, Ontario, near
Toronto, produces more than 350 advanced lubricants for
industries ranging from beauty to heavy manufacturing.
Over the past nine months, as the price of crude oil has
languished, Suncor has spent about $7 billion (C$9 billion) on
acquisitions and development, giving it a production capacity of
about 164,000 barrels of oil per day.
Last week, Suncor announced plans to raise about $1.9
billion (C$2.5 billion) in equity by selling 71.5 million of its
shares. The offering is expected to close on
Wednesday.