PBF Holding Co. To Pay $400 Million For Sunoco's Toledo Refinery
02 Dicembre 2010 - 11:20PM
Dow Jones News
Sunoco Inc (SUN) said Thursday it will sell its Toledo, Ohio,
refinery to PBF Holding Company LLC for $400 million.
The acquisition, scheduled for completion in the first quarter
of 2011, would mark a further expansion of PBF's U.S. refining
portfolio at a time of struggle for the industry. PBF, led by
refining industry veteran Thomas O'Malley and funded by European
refiner Petroplus Holdings AG (PPHN.VX), The Blackstone Group (BX)
and First Reserve Corp., has already bought one East Coast refinery
and is in talks to buy another from San Antonio-based Valero Energy
Corp. (VLO).
U.S. refiners have been beset by reduced demand after the recent
recession and excess production capacity built during the
commodities bubble of late 2008. With higher fuel emissions
standards and alternative fuels making inroads into their markets,
most refiners are struggling to keep healthy margins.
"Selling the Toledo refinery will enable us to direct resources
and management focus toward growing the logistics and retail
businesses where we have competitive advantages, as well as
generate cash and strengthen our balance sheet," Sunoco Chief
Executive Lynn Elsenhans said in a prepared statement.
Sunoco will receive $200 million in cash and $200 million in a
promissory note from PBF. In addition, the purchase agreement
included a payment of up to $125 million based on the future
profitability of the refinery.
The Toledo refinery employs about 600 people and can turn about
170,000 barrels a day of crude oil into gasoline, diesel fuel,
kerosene, propane, residual fuels and petrochemicals, according to
the company's website.
PBF, which started as a $2 billion fund in 2008, in June
completed its acquisition of Valero's 182,000 barrel-a-day Delaware
City, Delaware, refinery and terminal assets for $220 million. PBF
is also in talks to buy Valero's 160,000 barrel-a-day Paulsboro
refinery in New Jersey for $180 million in cash and a note for an
additional $180 million within 18 months of the deal closing.
Sunoco also announced that it may extend its target date for
selling its SunCoke Energy segment. Sunoco originally expected to
sell SunCoke, which turns waste crude oil into petrochemical
feedstocks, in the first half of 2011. The deadline "may be
extended" pending the conclusion of a lawsuit with ArcelorMittal
(MT, MT.AE) concerning coke pricing, Sunoco said. SunCoke and
ArcelorMittal have had discussions on resolving the matter, which
is scheduled to come to trial in May, according to Sunoco.
-By Ben Lefebvre, Dow Jones Newswires; 713-547-9201;
ben.lefebvre@dowjones.com
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