06 September 2011 14:03 [Source: ICIS news]
LONDON (ICIS)--Sunoco plans to exit its refining business and has begun the process to sell its refineries at Philadelphia and Marcus Hook, Pennyslvania, in the US, the company said on Tuesday.
Sunoco will idle the main processing units at the facilities in July 2012 if a suitable transaction cannot be implemented, the US refining and marketing company said.
Chairman and CEO Lynn Elsenhans said its refining business had not performed well financially and a sale would allow Sunoco to focus on retail and logistics.
“We have made progress in increasing the efficiency of our refineries over the last several years, but given the unacceptable financial performance of these assets, it is clear that it is in the best interests of shareholders to exit this business and focus on our profitable retail and logistics businesses, which have higher returns, growth potential, and provide steady, rateable cash flow,” Elsenhans said.
With the separation of metallurgical coke manufacturer SunCoke Energy and the sale of its chemicals business, Sunoco’s decision to exit refining marks a fundamental shift away from manufacturing that will reposition the company, it said in a statement.
The company expects to record a pre-tax non-cash charge of between $1.9bn (€1.3bn) and $2.2bn in the third quarter of 2011, relating to impairment of the plant and equipment in the refineries.
If the processing units are idled, additional pre-tax charges of up to $500m, primarily related to contract terminations, staffing costs and severance, may be incurred, Sunoco said.
Sunoco is conducting a comprehensive strategic review to determine the best way to deliver value to shareholders, it said.
“With SunCoke’s recent initial public offering, our complete exit from the chemicals business, and our plan to exit refining, we have an opportunity to take a fresh look at all aspects of the company and gain added perspective on how best to use our cash and maximise the potential for our strong retail and logistics businesses,” Elsenhans said.
($1 = €0.71)
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