Petroplus Holdings AG (SWX: PPHN) and BP PLC today announced that
Petroplus intends to acquire the Coryton Refinery, the adjacent bulk
terminal and BP's UK bitumen business, located on the Thames Estuary
in the United Kingdom. The Coryton Refinery has a total nameplate
crude capacity of approximately of 172,000 barrels per day and up to
an additional 70,000 barrels per day of other feedstocks, principally
straight run fuel oil. Subject to the review and approval from
regulatory authorities, the transaction is expected to close in the
first half of 2007. The Board of Directors of Petroplus has approved
the transaction and BP has received all necessary internal approvals.
The sale price of $1.4 billion (plus hydrocarbons, to be valued at
closing) includes the adjacent bulk terminal and BP's UK bitumen
business which is closely integrated with the refinery.
Until the transaction is completed, BP will continue to operate
the Coryton refinery. Under the terms of the agreement Petroplus will
enter into a supply agreement with BP to supply BP's UK based retail
and other businesses. The off-take agreement will provide for a
majority of the total production volume of the refinery and will be
priced at market rates.
Coryton is a major refinery in the Southeast of the United
Kingdom, and is the primary supplier of gasoline, diesel fuel, heating
oil and jet fuel in this market. Coryton has a large marine facility
for importing crude oil and other feedstocks as well as exporting
products. The refinery supplies both Heathrow and Gatwick airports
with jet fuel via direct pipelines and has one of the largest road
distribution terminals in Europe. Coryton currently produces
approximately 40% gasoline, 40% middle distillates with the remainder
of production being LPGs, fuel oil and bitumen. The refinery currently
employs in the region of 540 staff and numerous contractors.
Commenting on the potential acquisition, Mr. Thomas D. O'Malley,
Chairman and Chief Executive Officer of Petroplus, remarked, "The
Coryton Refinery will be a very significant addition to Petroplus's
current portfolio of North Sea refining assets. The refinery is
sophisticated, with a Nelson Complexity Rating of 12.0. Approximately
80% of Coryton's output is in the form of clean transportation fuels."
O'Malley continued, "The management and staff are a professional,
well-trained workforce and the key to the future success of this
facility. Petroplus will emphasize safety and environmental compliance
as it does at all its facilities. Coryton has a well established
culture in this regard and we will continue to emphasize a strong
program of constant improvement."
Mr. O'Malley concluded, "We are committed to working with our BP
counterparts to ensure that we provide a safe and stable transition
period for the refinery and all of its employees. We look forward to a
successful transaction."
Karyn F. Ovelmen, Chief Financial Officer of Petroplus, stated,
"In total, this acquisition represents about a 55% increase to our
processing capacity and represents a significant increase to our
earnings and operating cash flows. We expect to fund the acquisition
primarily with debt. To maintain a strong balance sheet and an
appropriate ratio of debt-to-total capitalization, we are considering
the issuance of a maximum of six million shares of equity. The
combination of debt and equity versus all debt is more accretive to
cash flows with minimal dilutive effect to earnings per share.
Following the acquisition, we expect our debt-to-total capitalization
ratio to be about 45%. We intend to use the expected excess cash flow
from this refining asset to ultimately bring down the debt balance.
With this acquisition, Petroplus will solidify its position as
Northwest Europe's leading pure-play refining and wholesale marketing
company."
Petroplus will host a conference call on February 2, 2007
beginning at 12:00 pm GMT regarding the potential acquisition.
Interested parties may listen to the live conference call on the
Internet by logging on to the investor relations section of the
Petroplus Holdings AG website at www.petroplusholdings.com. A
presentation covering the acquisition will also be available on the
investor relations section of the Petroplus Holdings AG website at
www.petroplusholdings.com. The Company will also host a meeting at
12:00 pm CET in Zurich on Monday, February 5, 2007 regarding the
potential acquisition.
Petroplus Holdings AG is one of the largest independent refiners
and wholesalers of petroleum products in Europe. Petroplus focuses on
refining and currently owns and operates three refineries across
Europe: the Cressier refinery in the canton of Neuchatel, Switzerland,
the Teesside refinery in Teesside, United Kingdom and the Belgium
Refining Company ("BRC") refinery in Antwerp, Belgium. Petroplus has
entered into an agreement with ExxonMobil Central Europe Holding GmbH
("ExxonMobil CE") to purchase a refinery in Ingolstadt, Germany. The
existing refineries have a combined crude oil volume processing
capacity, known as throughput capacity, of approximately 295,000 bpd,
and the Ingolstadt refinery has a throughput capacity of approximately
110,000 bpd. The Coryton Refinery has a total nameplate crude capacity
of approximately of 172,000 barrels per day and up to an additional
70,000 barrels per day of other feedstocks.
This press release contains forward-looking statements, including
the company's current expectations with respect to future market
conditions, future operating results, the future performance of its
refinery operations, and other plans. Words such as "expects,"
"intends," "plans," "projects," "believes," "estimates," "may,"
"will," "should," "shall," and similar expressions typically identify
such forward-looking statements. Even though Petroplus believes the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations
will be attained. Factors that could cause actual results to differ
materially from expectations include, but are not limited to,
operational difficulties, varying market conditions, potential changes
in gasoline, crude oil, distillate, and other commodity prices,
government regulations, and other factors contained from time to time
in the Petroplus's annual and interim reports.
This announcement does not constitute an offer of securities for
sale in any jurisdiction. Securities may not be offered or sold in the
United States except pursuant to registration under the US securities
laws or an exemption from such registration. The Company does not
intend to register any such securities.
