Tesoro makes deal with Par Petroleum over Hawaii refinery, assets

18 June 2013 00:00  [Source: ICIS news]

HOUSTON (ICIS)--Tesoro has reached an agreement to sell all of its Hawaii-based interests to a subsidiary of Par Petroleum in a deal valued at $340m-$390m (€255m-293m), Tesoro announced on Monday.

Tesoro Hawaii operates retail stations and associated logistical assets, as well as the 94,000 bbl/day Kapolei refinery, which the company shuttered back in April as part of a plan to convert it into a distribution terminal.

In January 2012, Tesoro announced it was planning to sell the refinery and other Hawaii operations because they no longer fit the San Antonio, Texas-based company’s business strategy.

Houston-based Par Petroleum plans to operate the assets it is purchasing as an integrated refining, logistics and retail system, Tesoro said in a news release.

Total cost of the transaction, which Tesoro thinks will be complete in Q3 2013, includes $75m for the Hawaii operations, $225m-275m for the market value of net working capital and a $40m earn-out arrangement payable over three years based on consolidated gross margins, Tesoro said.

"We are pleased to have reached this positive outcome for the company," said Tesoro CEO Greg Goff. "While the Hawaii operations do not align with our strategic focus, we believe they offer a great opportunity for Par Petroleum."

($1 = €0.75)

Additional reporting by Tracy Dang

By: Jeremy Pafford
+1 713 525 2653

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