WASHINGTON (dpa-AFX) - Private equity firm The Carlyle Group L.P. (CG) and Sunoco Inc. (SUN) would form Philadelphia Energy Solutions, a joint venture that would enable the historic Philadelphia refinery to continue operating. The refinery processes 330,000 barrels of oil per day into various refined products and was slated for shut down in August of 2012. The joint venture is likely to save 850 jobs, secure the region's fuel supply by continuing the daily flow of 10 million gallons of various fuels, create 100-200 new, permanent jobs, and thousands of construction jobs.
The capital for this investment would come from the Carlyle Equity Opportunity Fund and the Carlyle Energy Mezzanine Opportunities Fund. JPMorgan Chase (JPM) would provide working capital financing for intermediate products owned by the refinery in the form of an asset-backed loan, subject to documentation. The transaction may close in the third quarter of 2012. Financial terms were not disclosed.
Pursuant to the deal, Sunoco would contribute its Philadelphia refinery assets to the joint venture in exchange for a non-operating minority interest. The Carlyle Group's investment would directly flow to the refinery's balance sheet to fund future capital projects, facility upgrades and enhance the refinery's working capital. Carlyle would hold the majority interest, and oversee day-to-day operations of the joint venture and the refinery. Phil Rinaldi, who has led other refining and chemical business turnarounds, would become the chief executive of Philadelphia Energy Solutions.
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© 2012 AFX News
