BREAKING NEWS FROM CNBC’S KATE KELLY: SUNOCO & CARLYLE CLOSING IN ON LARGE REFINERY DEAL
Following is the unofficial transcript of breaking news from CNBC’s Kate Kelly. All references must be sourced to CNBC.
KATE KELLY: THE CARLYLE GROUP, THE PRIVATE EQUITY FIRM, IS IN ADVANCED TALKS WITH SUNOCO ABOUT PURCHASING YET ANOTHER PHILADELPHIA BASED REFINERY. YOU REMEMBER THE DELTA STORY. DELTA BOUGHT A PHILADELPHIA AREA REFINERY ABOUT A MONTH OR TWO AGO, IN AN UNUSUAL DEAL FOR AN AIRLINE. IN THIS CASE, IT IS A PRIVATE EQUITY FIRM THAT IS SERIOUSLY CONSIDERING PURCHASING A REFINERY. THIS ONE PRODUCES GAS, DIESEL, A VARIETY OF REFINED PRODUCTS -- 330,000 BARRELS A DAY. IT IS A REFINERY THAT WAS SET TO BE IDLED THIS SUMMER IF SUNOCO COULD NOT FIND A BUYER. BUT I’M TOLD THAT THEIR TALKS WITH CARLYLE, WHICH HAVE BEEN EXCLUSIVE FOR ABOUT TWO MONTHS NOW, ARE MOVING RIGHT ALONG. THEIR EXCLUSIVITY AGREEMENT IS SET TO EXPIRE ON FRIDAY AND THE HOPE I THINK IS TO GET A DEAL DONE BEFORE THEN IF POSSIBLE, ALTHOUGH RENEWING THE EXCLUSIVITY ARRANGEMENT IS OF COURSE AN OPTION. I DON’T HAVE THE EXACT TERMS, BUT APPARENTLY CARLYLE IS GOING TO GET THIS VERY MUCH ON THE CHEAP. THEY WILL PROVIDE SOME CASH APPARENTLY, BUT SUNOCO IS GOING TO RETAIN A MINORITY STAKE. AND THE OTHER THING YOU CAN’T RULE OUT IS THAT THE STATE OF PENNSYLVANIA MAY PROVIDE SOME ASSISTANCE IN THIS CASE AS THEY DID WITH DELTA. THEY ARE CERTAINLY EAGER NOT TO SEE 900 PEOPLE LAID OFF AND HOPING THAT THIS THING CAN BE TURNED AROUND. IT HAS BEEN A TOUGH COUPLE OF YEARS FOR THE REFINING BUSINESS AS YOU GUYS MAY REMEMBER FROM THAT DELTA STORY. THESE ASSETS MIGHT HAVE BEEN A BILLION BUCKS FIVE YEARS AGO, NOW DELTA BOUGHT THEIRS FOR ABOUT 150 MILLION. I’M TOLD THIS COULD BE WITHIN THAT ZIP CODE, PERHAPS EVEN CHEAPER. BUT OF COURSE, IT DEPENDS ON THE TERMS, GUYS. WE’LL SEE WHAT HAPPENS, I’LL KEEP YOU POSTED AS WE MOVE ALONG.
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