Petroplus Holdings AG (SWX: PPHN) today announced that Petroplus
intends to acquire the Petit Couronne and Reichstett Vendenheim
refineries, located in France, from Shell International Petroleum
Company Limited. The Petit Couronne Refinery and the Reichstett
Vendenheim Refinery have total nameplate crude capacities of 154,000
barrels per day and 85,000 barrels per day, respectively. Subject to
the staff council consultation, review and approval from regulatory
authorities and the execution of a sale and purchase agreement, the
transaction is expected to close in the second quarter of 2008. The
Board of Directors of Petroplus has approved the proposed transaction
and Petroplus and Shell have signed a Letter of Intent. Until the
transaction is completed, Shell will continue to operate both
refineries.
The purchase price of both refineries is $475 million, excluding
net working capital, which is expected to be approximately $400
million.
Petroplus intends to enter into certain agreements with Shell to
supply Shell's France based retail and other businesses. The off-take
agreement will provide for approximately 30% of gasoline and middle
distillates along with the bitumen and lubricants produced at these
refineries. The products sold will be priced at market rates.
The Petit Couronne refinery is located 130 kilometres northwest of
Paris on the River Seine. The refinery produces approximately 40%
middle distillates and 20% gasoline. Its major units include crude and
vacuum distillation, fluid catalytic cracking, visbreaking,
hydrotreating, reforming, lubricant production and bitumen production.
Crude is delivered to the refinery via a 70 kilometre crude pipeline
from the port at Le Havre. The crude slate of the refinery is
approximately 70% high-sulphur and 30% low-sulphur crude oil. The
Reichstett Vendenheim refinery is located in Alsace, France near the
city of Strasbourg, about 5 kilometres from the River Rhine. The
refinery produces approximately 45% middle distillates and 20%
gasoline. Its major units include crude and vacuum distillation, fluid
catalytic cracking, visbreaking, hydrotreating, reforming and bitumen
production. Crude deliveries to the refinery are via the SPSE pipeline
from Fos in the South of France. The crude slate of the refinery is
about 45% high-sulphur and 55% low-sulphur crude oil.
Commenting on the potential acquisition, Mr. Thomas D. O'Malley,
Chairman and Chief Executive Officer of Petroplus, remarked, "The
acquisition of the French refineries will be another very significant
addition to Petroplus's current portfolio of assets, which, when
combined with our existing asset base, results in a total throughput
capacity of about 864,000 barrels per day. The acquisition is
completely in-line with the acquisition strategy that we have been
outlining since our arrival at Petroplus last year. It is expected to
be meaningfully accretive to earnings per share, cash flow positive
from day one and the company will have a strong balance sheet
immediately following the acquisition."
Robert Lavinia, President of Petroplus, commented, "Both
refineries have been well-maintained and have experienced teams
managing each facility. The management and staff are a professional,
well-trained workforce and the key to the future success of these
facilities. Petroplus will emphasize safety and environmental
compliance as it does at all its facilities. We are committed to
working with our Shell counterparts to ensure that we provide a safe
and stable transition period for the refineries and the employees. We
look forward to a successful transaction."
Karyn F. Ovelmen, Chief Financial Officer of Petroplus, said, "We
intend to finance the acquisitions with cash on hand and debt.
Following the acquisition, we expect our net debt-to-net
capitalization ratio to be about 42%. We intend to use the expected
excess cash flow from these refining assets and our existing
operations to ultimately bring down the debt balance. The refineries
provide a 38% increase in refining capacity to the company, further
geographic diversity and additional high-sulphur crude processing
capability with production focused on the middle of the barrel.
Thereby, as with our previous acquisitions, makes our company
profitability and free cash flows more resilient to market
fluctuations in refined petroleum product cracks. Immediately
following the acquisition, we should continue to have a strong balance
sheet, excellent liquidity position and fully prepared to pursue
additional high-return growth opportunities."
Petroplus will host a conference call on August 2, 2007 beginning
at 11:00 am CET regarding the potential acquisition. Interested
parties can call into the conference and 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
dial-in number for the conference call will be released at 10 am and
also included on the Petroplus Holdings AG website or parties may call
the investor relations department for the dial-in number.
Petroplus Holdings AG is the largest independent refiner and
wholesaler of petroleum products in Europe. Petroplus focuses on
refining and currently owns and operates five refineries across
Europe: the Coryton refinery on the Thames Estuary in the United
Kingdom, the Ingolstadt refinery in Ingolstadt, Germany, the Belgium
Refining Company refinery in Antwerp, Belgium, the Cressier refinery
in the canton of Neuchatel, Switzerland, and the Teesside refinery in
Teesside, United Kingdom. The refineries have a combined throughput
capacity of approximately 625,000 bpd. The Petit Couronne and
Reichstett Vendenheim refineries have a combined total nameplate crude
capacity of approximately of 239,000 barrels per day.
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.