Williams agrees to sell Memphis refinery
26 Nov 2002
Williams announced today that it has signed a definitive agreement to sell its Memphis, Tennessee refinery and other related operations to Premcor for approximately $465 million cash.
Under the terms of the agreement, Premcor will pay $315 million cash for the refinery and related fixed assets at closing. Premcor will also purchase petroleum inventories estimated today at about $150 million.
The agreement also contains an earn-out provision that allows Williams to receive up to an additional $75 million over the next seven years. The earn-out would be paid annually depending on the level of refining margins.
The Memphis assets include a 190,000-barrel-per-day refinery, two associated truck-loading racks, three petroleum terminals, supporting pipeline infrastructure that transports both crude oil and refined products, and crude oil tankage.
The parties expect the sale to close before March 31, 2003. As a result of the sale, Williams expects to record an additional pre-tax loss in the fourth quarter of approximately $30-$35 million.
