October 10, 2018 / 10:29 AM / 2 years ago

Parkland Fuel to buy 75 pct in fuel marketer SOL Investments for C$1.57 billion

(Reuters) - Parkland Fuel Corp (PKI.TO), a Canada-based marketer of petroleum products, said on Wednesday it would buy a 75 percent stake in privately held SOL Investments Ltd for C$1.57 billion ($1.21 billion), to expand further in the U.S. Gulf and the Atlantic coasts.

The deal gives Parkland access to SOL’s 526 retail gas stations and increases its total annual fuel volume to more than 21 billion liters. It also gives the company a strong foothold in the Caribbean oil market.

Several U.S. oil companies have shown an interest in the region after oil major Exxon Mobil Corp (XOM.N) discovered large deposits of oil off the coast of Guyana close to Caribbean islands.

Shares of Parkland, which bought Chevron Corp’s (CVX.N) gasoline stations and refinery in British Columbia last year, rose 6.5 percent in morning trading on the Toronto Stock Exchange.

Upon closing of the deal, expected in late fourth quarter of 2018, SOL’s parent company Simpson Group will own a stake of about 10 percent in Parkland.

Parkland will also have the option to buy the remaining 25 percent stake in the future at a pre-determined price.

The transaction will be financed by Parkland through debt financing of around C$1.1 billion underwritten by Canadian Imperial Bank of Commerce and National Bank of Canada.

Parkland said it will retain the SOL operating brand and key management and SOL will continue to be managed from the Caribbean.

National Bank Financial Inc served as the financial adviser to Parkland.

($1 = 1.2959 Canadian dollars)

Reporting by Laharee Chatterjee and Shanti Nair in Bengaluru; Editing by Shailesh Kuber

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below