Sunoco has entered into exclusive discussions with The
Carlyle Group, a global alternative asset manager, regarding
the formation of joint venture involving Sunocos 330,000
bpd refinery in Philadelphia, Pennsylvania.
If a transaction is reached, Sunoco would sell its
Philadelphia refinery assets in exchange for a
non-operating minority interest in the joint venture, the
In addition, Sunoco says it would have no ongoing capital
obligations with respect to the refinery.
Carlyle would contribute cash to the joint venture, hold the
majority interest and oversee day-to-day operations of the
joint venture and the facility.
financial terms of the potential transaction were disclosed.
Moreover, there are no assurances the two companies will come
to agreement, Sunoco officials said.
The Carlyle Group has financial depth, broad energy
sector experience, and a history of building value, said
Sunoco CEO Brian P. MacDonald.
We believe having a strong partner like Carlyle with a
track record of leading successful business turnarounds is
necessary to preserve the facilitys future,
MacDonald added. We have been encouraged by the offers of
support by federal, state, local and labor officials.
We are working actively with Sunoco and other
stakeholders to explore ways to keep this vital facility
operating, said Rodney S. Cohen, managing director of The
The facility has been operating at a significant loss
for some time, and we are exploring every avenue to create a
viable plan, Cohen added. It is a heavy lift and we
are not sure a solution is possible, but we are doing the
The USW is more than willing to work with all levels
of government and any willing party who has the common goal
with us to keep these East Coast refining facilities in operation, said
Leo W. Gerard, international president of the United Steel
We continue to believe their ongoing operation is
crucial not only to the thousands of our members employed there
but to the surrounding communities and to effectively deal with
the nations fuel and energy issues, Gerard
In light of the discussions with Carlyle, Sunoco said it
intends to extend its previously-announced timeline and operate
the Philadelphia refinery through July 2012.
If a suitable transaction with Carlyle cannot be completed,
the company would proceed with idling the main processing units
at the refinery in August 2012.