OLD GREENWICH, Conn., June 7 /PRNewswire-FirstCall/ -- Premcor Inc.
(NYSE: PCO) today announced that its subsidiary, Sabine River Holding Corp.,
has completed a restructuring permitted by the successful consent solicitation
of the holders of its Port Arthur Finance Corp. 12 1/2% Senior Notes due 2009.
The restructuring resulted in Sabine and its subsidiary companies becoming
wholly owned direct or indirect subsidiaries of The Premcor Refining Group
Inc. The Premcor Refining Group Inc., a wholly owned indirect subsidiary of
Premcor Inc., fully and unconditionally guaranteed the payment obligations
under the Port Arthur Senior Notes.
Thomas D. O'Malley, Premcor's Chairman, Chief Executive Officer, and
President, said, "The consent has allowed Premcor to simplify its previous
corporate structure, which was overly complicated, difficult to explain to
investors, and expensive to maintain. We now have a structure that will better
enable us to grow our business in an efficient manner. The consent has also
allowed us to make available $137 million of cash at Sabine, which was earning
interest at two percent per annum, to pay off debt at par that was costing us
over seven percent per annum. We used approximately $84 million generated
from our successful IPO to pay off the remaining balance of our $221 million
bank debt at Port Arthur."
O'Malley continued, "We are rapidly reaching our goal of cutting our
$125 million annual interest burden in half, and reducing our
debt-to-total-capitalization ratio to 50 percent. We have now repaid about
$567 million of debt, representing an interest savings of $52 million per
annum, and we expect further debt reductions before the end of the second
quarter.
"The combination of interest expense reductions of approximately
$52 million per annum and the previously announced overhead reductions of
approximately $18 million per annum will provide us with pretax profit
enhancements of almost $18 million per quarter, which will be clearly visible
starting in the third quarter of 2002."
In view of the restructuring, Occidental Petroleum exercised its option to
exchange its 10 percent interest in Sabine for approximately 1.4 million newly
issued shares of Premcor Inc. common stock. After this exchange, Premcor will
have approximately 57.4 million shares outstanding.
The Premcor Refining Group Inc. guarantee of the Port Arthur Senior Notes
has not been, and will not be, registered under the Securities Act of 1933 and
may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements.
Premcor Inc. is one of the largest independent petroleum refiners and
marketers of unbranded transportation fuels and heating oil in the United
States.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including the
company's current expectations with respect to future market conditions,
future operating results, the future performance of its refinery operations,
and future debt reductions. Words such as "expects," "intends," "plans,"
"projects," "believes," "estimates," "may," "will," "should," "shall," and
similar expressions typically identify such forward-looking statements. Even
though Premcor 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 reports
filed with the Securities and Exchange Commission by the company and its
subsidiaries, including Sabine River Holding Corp., Premcor USA Inc., and The
Premcor Refining Group Inc., including the company's Form S-1 and its
subsidiaries' quarterly reports on Form 10-Q, reports on Form 8-K, and annual
reports on Form 10-K.
SOURCE Premcor Inc.
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Related links:
http://www.premcorinc.com
CONTACT:
Joe Watson, +1-314-854-9889, or Karen Davis,
+1-314-854-1424, both of Premcor Inc.
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