Par Petroleum Forms HIE Retail
Company set up to own, operate former Tesoro Hawaii sites; enters into credit agreement
HOUSTON -- Par Petroleum Corp. has created a new subsidiary that will own and operate the 31 Tesoro-branded gas stations that in acquired in September as part of its purchase of Tesoro Corp.'s Hawaii operations. The new company, HIE Retail LLC, has acquired the retail assets, including the stations, which sell fuel and merchandise on the islands of Oahu, Maui and Hawaii, from Hawaii Independent Energy LLC, also a subsidiary of Par Petroleum.
HIE Retail has entered into a credit agreement with Bank of Hawaii, which is extending credit to HIE Retail in the form of a senior secured term loan of up to $30 million and a senior secured revolving line of credit of up to $5 million.
The lenders initially advanced $26 million of the term loan and will advance an additional $4 million upon HIE Retail's compliance with certain liquor licensing requirements, if such requirements are satisfied prior to Dec. 31, 2014. It will use the proceeds of the term loan to finance the acquisition of the retail assets from Hawaii Independent Energy.
Par Petroleum also announced that it has repaid in full and terminated all of its outstanding obligations under the $30 million term loan portion of its delayed draw term loan credit agreement with Jefferies Finance LLC, as administrative agent for the lenders. The tranche B loans under the delayed draw term loan credit agreement in the amount of approximately $18.8 million remain outstanding.
Par Petroleum paid $539 million for Tesoro's refining, distribution and retail operations in Hawaii, reported The Honolulu Star-Advertiser. The total included $75 million for Tesoro's assets and $464 million for the company's inventory of crude oil and refined products.
Par Petroleum is a Houston-based company that manages and maintains interests in a variety of energy-related assets. It describes itself as "a growth company that looks for acquisitions with strong fundamentals and employees who can move the business forward."
Par's largest oil and gas asset is its investment in Piceance Energy LLC, which owns and operates natural gas reserves located in the Piceance Basin of Colorado. Par's operating activities are concentrated in its wholly-owned subsidiaries, Texadian Energy Inc. and Hawaii Independent Energy LLC.
Texadian Energy sources, markets, transports and distributes crude petroleum-based energy products, moving crude oil from the western United States and Canada to the refining hubs in the Midwest, the Gulf Coast and the East Coast. Hawaii Independent Energy's primary asset is a 94,000-barrel-per-day refinery on the island of Oahu. This refinery, together with substantial storage capacity, a 27-mile pipeline system, terminals and retail outlets, provides a substantial portion of the energy demands of Hawaii, it said.