ST. LOUIS, Aug. 24 /PRNewswire/ -- Premcor Inc. announced today that its
subsidiary, The Premcor Refining Group Inc., has completed the refinancing of
its working capital facility, which expires on October 31, 2001. The new
$650 million facility will mature in August 2003 and will be used primarily to
provide letters of credit in support of crude oil and feedstock purchases for
the company's three refineries. The company also has the ability to issue up
to an additional $140 million in letters of credit under a cash-backed
facility, bringing its total available facilities to $790 million.
The facility was launched at $500 million and subsequently upsized to
$650 million due to an excellent reception in the bank market. Structured in
two tranches, the facility was arranged by Deutsche Banc Alex. Brown Inc.
along with Fleet National Bank and TD Securities (USA), Inc., as agents. The
first tranche is a $150 million facility provided by institutional investors
that incorporates credit linked notes issued by Deutsche Bank, a technique
borrowed from the credit derivatives market. The transaction is the first
large-scale use of a synthetic term loan for a non-investment grade credit.
The second tranche is a $500 million revolving credit facility provided by
banks on substantially the same terms and conditions as the current facility.
"The combination of our strong operating performance and the innovative
structure of the credit facility generated significant interest from the
financial community. We view the fact that the facility was oversubscribed,
and closed in a very short period of time, as an endorsement of the steps we
have taken to transform Premcor into a leading independent refiner and
supplier of unbranded petroleum products," said William C. Rusnack, Chief
Executive Officer. "This credit facility will ensure our ability to satisfy
our crude oil requirements, even in high price market environments," added
Rusnack.
"The refinancing of the Premcor Refining Group's working capital facility
is a step towards improving our financial structure. As we announced earlier,
we are continuing to evaluate all strategic alternatives to maximize the value
of the company," continued Rusnack. "Our performance has been very strong the
last two quarters and we believe we have a much broader and more robust set of
options available to us than when the strategic alternatives process began.
These options include continued internal growth, acquisitions of additional
refining assets, a reduction of debt, a merger or joint venture, and a public
equity offering," said Rusnack.
Based in St. Louis, Premcor Inc., through its principal operating
subsidiaries, The Premcor Refining Group Inc. and The Port Arthur Coker
Company L.P., is currently the sixth largest U.S. independent oil refiner and
one of the largest unbranded merchant refiners based on rated crude oil
throughput capacity. The Company generated more than $7 billion in sales in
2000 and has an aggregate 490,000 bpd of crude distillation capacity at its
three refineries located in Port Arthur, Texas (250,000 bpd), Lima, Ohio
(170,000 bpd) and Hartford, Illinois (70,000 bpd). Premcor's principal
shareholders are affiliates of The Blackstone Group (79%) and Occidental
Petroleum (18%).
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including the
refinancing of The Premcor Refining Group Inc.'s credit facility and the
current expectations with respect to Premcor Inc.'s evaluation of strategic
alternatives. 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 Inc. 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 Sabine River Holding
Corp., Premcor USA Inc. and The Premcor Refining Group Inc., including
quarterly reports on Form 10-Q, reports on Form 8-K, and annual reports on
Form 10-K.
For further information, please visit us on the worldwide web at
http://www.premcor.com .
SOURCE Premcor Inc.
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Related links:
http://www.premcor.com
CONTACT:
Investors, Karen Davis, +1-314-854-1424,
ir@premcor.com , or Media, Jim Joyce, +1-314-854-1511,
jim.joyce@premcor.com , both of Premcor Inc.
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