SPC and Caltex to acquire BPS' refining interest in Singapore

abarrelfullabarrelfull wrote on 21 May 2012 07:05
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13-April-2004

Further to Singapore Petroleum Company Limited’s (“SPC”) announcements (MASNET Announcements No. 5 and No.102) on 1 March 2004, Caltex Singapore Private Limited (“Caltex”) has agreed to acquire half of BP Singapore Pte Limited’s (“BPS”) [http://abarrelfull.wikidot.com/singapore-refining-corporation-jurong-island-refinery Singapore refining interests[.

The acquisition by SPC and Caltex involves BPS’ one-third equity interest in Singapore Refining Company Private Limited (“SRC”); BPS’ interest in the SRC joint venture and related refining assets in SRC; and BPS’ one-sixth equity interest in Tanker Mooring Services Company Pte Ltd (“TMS”), collectively referred to as the “Assets”.

SPC and Caltex (collectively referred to as the “Purchasers”) will each pay US$70 million for their respective 50 per cent share in the Assets. The Purchasers will also acquire in equal shares, all of BPS’ crude and product inventories at SRC at agreed market related prices on completion of the acquisition. The acquisition is expected to be completed by 30 June 2004.

The region’s projected robust economic growth and improving oil market fundamentals underpin the Purchasers’ move to increase their stake in SRC.

Mr Choo Chiau Beng, Chairman of SPC, said, “SPC and Caltex have developed an excellent relationship over the years. We welcome this decision by Caltex which we see as a strong vote of confidence in the growth and prospects in the region. We will work together to enhance and add further value to the refinery.”

Assuming the transaction was effected at the beginning of 2003, the proforma earnings per SPC share would improve from 13.92 cents to 16.49 cents for the year ended 31 December 2003.

The transaction would not have any material impact on the audited net tangible asset per SPC share as at 31 December 2003, assuming that the transaction had been effected on 31 December 2003.

For the year ended 31 December 2003, the proforma net profit before tax attributable to the Assets of S$13.1 million amounts to 18.5 per cent of the SPC Group’s audited net profit before tax of S$70.7 million.

The consideration of US$70 million for a 50 per cent share in the Assets amounts to approximately 9.5 per cent of SPC’s market capitalisation of S$1,254.2 million, based on the weighted average price of SPC shares transacted on 12 April 2004.

The current estimated amount payable by SPC for a 50 per cent share of the crude and product inventories would range from US$38 million to US$55 million, depending on the crude and product pricing at completion date. Based on the higher amount of US$55 million, the aggregate consideration payable for the Assets and the inventories would amount to US$125 million which is 17.0 per cent of SPC’s market capitalisation of S$1,254.2 million, based on the weighted average price of SPC shares transacted on 12 April 2004.

Completion of the acquisition is conditional upon, inter alia, the execution of definitive agreements between SPC, Caltex and BPS and relevant third party consents.

None of the directors of SPC or its (so far as SPC is aware) controlling shareholders has any interest, whether direct or indirect, in the acquisition.

Background information

SPC is an associated company of Keppel Oil & Gas Services Pte Ltd, a wholly owned subsidiary of Keppel Corporation Limited.

BPS is a company incorporated in Singapore and is a wholly owned subsidiary of UK-based British Petroleum p.l.c.

Caltex is a company incorporated in Singapore and is a wholly owned subsidiary of ChevronTexaco.

SRC is the operating company for an oil refinery situated on Jurong Island with a nameplate capacity of 285,000 barrels per day. SRC, is also the joint venture company set up in 1979 by SPC, BPS and Caltex, or their respective predecessors.

TMS provides fixed berth jetty services to the shareholders of SRC for the discharge of crude oil into the refinery. PSA Marine Private Limited holds 50 per cent of the shares in the capital of TMS. The remaining 50 per cent is held in equal proportions among SPC, BPS and Caltex.


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