Valero and Tesoro Reach New Terms of Agreement for Sale of Golden Eagle Refinery and Related Retail Assets

abarrelfullabarrelfull wrote on 09 Apr 2013 09:06

Latest News

{"module":"feed\/FeedModule","params":{"src":"http:\/\/\/feed\/pages\/pagename\/blog%3A_start\/category\/blog\/limit\/10\/t\/My+Blog","limit":"4","module_body":"* %%linked_title%%"}}
  • Want a weekly review of refining news?


Valero Energy Corporation (NYSE: VLO) and Tesoro Petroleum Corporation (NYSE: TSO) have come to an agreement regarding Tesoro's purchase of the 168,000 barrel-per-day (BPD) Golden Eagle Refinery and 70 associated retail sites in Northern California.

The terms of the agreement have been adjusted to include:
-A $50 million price reduction bringing the total purchase price to $1.075 billion; and
-Delayed payment of $150 million of the purchase price in the form of two ten-year notes.

The delayed payment includes a $100 million, 10-year promissory note including a zero coupon for the first five years and an interest rate of 7.5 percent thereafter. It also includes a $50 million, 10-year promissory note that's interest-free for the first year and includes a 7.47 percent interest rate for the second through fifth years. The annual interest rate increases to 7.5 percent for the last five years.

The amended terms of the agreement have already been approved by the California Attorney General and are subject to review by the Federal Trade Commission. The transaction is expected to close on May 17, but could close earlier depending on receipt of the approvals and Tesoro's receipt of final documentation of the amendment to its existing credit facility.

"Obviously, we were disappointed that the transaction did not go through as originally outlined, but the revised terms of the transaction are still very favorable for all parties and an expedited close is also in the best interest of all parties," said Valero Chairman and CEO Bill Greehey.

"This agreement is good news for the employees, shareholders and other stakeholders. It enables Tesoro and Valero to move ahead with the transaction and assures the Golden Eagle refinery and retail employees a sound future," he said.

The divestiture of the Golden Eagle Refinery and associated retail assets was mandated by the consent order executed last year between Valero and the Federal Trade Commission and similar orders executed with the states of California and Oregon as a condition of the company's merger with Ultramar Diamond Shamrock Corporation.

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License