Under the terms of the agreement, Alon Energy has agreed to repay the capital expenditures relating to the scheduled major maintenance turnaround of the Krotz Springs refinery in 2015.
Alon Partners will complete the transaction in a combination of $100m cash and $337.5m in common units representing limited partner interests in Alon Partners.
The transaction is scheduled to be completed on or about 28 November 2014.
The acquisition of 74,000 barrels per day Krotz Springs refinery is expected to reduce Alon Partners’ dependence on a single asset as well as simplify Alon Energy’s corporate and capital structure.
Alon Partners and Alon Energy president and chief executive officer Paul Eisman said: "The Krotz Springs refinery drop down should provide a significant increase in Adjusted EBITDA for Alon Partners.
"Alon Energy’s Krotz Springs refinery is well positioned to generate significant free cash flow, and this transaction unlocks the value of that business. This is a very positive step for the continued success of both Alon Partners and Alon Energy."
Capable of processing substantial volumes of low sulfur, or sweet, crude oils to produce a high percentage of light, high-value refined products, the refinery has direct access to the Colonial product pipeline system.
Image: Alon operates three refineries in Paramount, Long Beach and Bakersfield, California, US. Vichaya Kiatying-Angsulee/Freedigitalphotos.net.
