Pennzoil-Quaker State Company Signs Letter of Intent to Sell the Shreveport Refinery
16 January 2001
Pennzoil-Quaker State Company Signs Letter of Intent to Sell the Shreveport Refinery
HOUSTON, Jan. 16 Pennzoil-Quaker State Company
today announced that it has entered into a letter of intent with Calumet
Lubricants Company, LP for the sale of the Company's Shreveport, Louisiana
refinery. The two parties have begun the negotiation of a definitive purchase
and sale agreement, with closing expected by April 30, 2001. The Shreveport
refinery has been for sale as part of the Company's decision to divest non-
strategic assets and focus on its automotive consumer products businesses.
Non-strategic asset divestitures announced over the last year include the
Company's Penreco partnership interest, Viscosity Oil, Specialty Environment
Services, its Carson packaging plant, as well as its interest in the Bareco
partnership and the Rouseville, Pennsylvania refinery, which were purchased by
Calumet in April 2000.
"The sale of the Shreveport refinery represents the last significant
milestone in our divestiture program," said James J. Postl, president and
chief executive officer of Pennzoil-Quaker State Company. "While we still
need to execute the definitive agreement, based on our experience with Calumet
we are optimistic that a transaction will be completed."
The Shreveport refinery accounted for approximately 20% of Pennzoil-Quaker
State Company's consolidated revenue for the first nine months of 2000, but
produced a recurring operating loss of $14.6 million before taxes during that
period. Total after-tax charges of approximately $80 million to $100 million
are expected in connection with the divestiture, approximately 50% of which is
non-cash in 2001. The Company expects to recover approximately $60 million in
working capital.
Pennzoil-Quaker State Company also announced plans to cease processing
paraffinic crude oil at the refinery in approximately three months. This
cessation will significantly reduce operations at the refinery, resulting in a
downsizing of the current workforce. The Company will continue processing
naphthenic crude oil for the production of lubricants. These actions are
consistent with Calumet's planned naphthenic and paraffinic base oil
operations for Shreveport.
The Company continues to have blending, packaging and distributing
operations in the Shreveport, Louisiana area, and those facilities and
personnel are not affected by today's announcement.
Calumet Lubricants Company, LP has headquarters in Indianapolis, Indiana.
The company was founded in 1916 with the goal of producing the highest quality
naphthenic specialty oils available. Today it operates specialty plants in
Princeton and Cotton Valley, Louisiana, producing Hydrocal II Naphthenic Base
Oils, Calsol process oils and a diverse array of solvents and specialty
products, and plants in Rouseville and Reno, Pennsylvania, producing a full
range of wax products.
Pennzoil-Quaker State Company is a leading worldwide automotive consumer
products company, marketing over 1,300 products with 20 leading brands in more
than 50 countries. The Company markets Pennzoil(R) and Quaker State(R) brand
motor oils, the number one and number two selling motor oils in the United
States. Jiffy Lube, a wholly owned subsidiary of Pennzoil-Quaker State
Company, is the world's largest fast lube operator and franchiser. For more
information about Pennzoil-Quaker State Company, visit its web site at
http://www.pennzoil-quakerstate.com/.