Vopak to sell 20% stake in Bahamas oil storage JV terminal

17 January 2011 09:27  [Source: ICIS news]

SINGAPORE (ICIS)--Dutch logistics firm Vopak said on Monday it will sell its 20% stake in the Bahamas Oil Refining Co (BORCO), an oil storage terminal, to US-based pipeline and storage terminal operator Buckeye Partners.

Vopak said the sale was expected to generate an after-tax profit of over $150m (€112.5m), which would be booked upon completion of the deal in the first quarter of 2011.

The stake would be sold for $168m in cash and around $100m worth of Buckeye units, the company said.

Vopak’s decision to divest its 20% equity stake came after Buckeye expressed its intention to take over the operating responsibilities of the terminal once the current operating agreement expires, the company said.

The Dutch company said it would sell its stake at the same terms that its JV partner - First Reserve Corporation (FRC) - got in December 2010 for the latter’s 80% stake.

FRC had agreed to divest its stake in BORCO to Buckeye for $1.36bn, including the proportionate debt in the joint venture, Vopak said in a statement.

“Provided the value of the Buckeye units will not decrease prior to the closing date of the transaction, the sale of Vopak’s 20% equity stake in BORCO was expected to generate an after-tax profit over $150m,” the company said.

The transaction was expected to be completed in coming weeks, subject to government approvals in the Bahamas.

“The cash proceeds of the sale will be allocated to fund Vopak’s global growth strategy,” the company added.

Located in Freeport, Bahamas, BORCO is an independent storage terminal with a capacity of 3.4m cubic meters for the storage and handling of crude oil, fuel oil and clean petroleum products, the statement said.

($1 = €0.75)

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By: Nurluqman Suratman

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