You are here
ST. LOUIS -- An investment group is offering $61 million to buy the Premcor Inc. oil refinery in Hartford, Ill.
With a number of refineries currently on the market as a result of a sluggish economy and weak oil market, a St. Louis-based concern led by Dan Baccarini, owner of The B&B Group Inc., is seeking to acquire the facility that is slated to close, the St. Louis Business Journal reported Tuesday.
Premcor, now under the stewardship of Tom O'Malley, who revitalized Tosco Corp. into the nation's leading independent refiner/marketer before it merged with Phillips Petroleum, said earlier this year it would not upgrade the facility. The refinery, which employs 300 workers, is scheduled to shut down this month.
Wrinkles must be ironed before a deal is sealed. According to the plan, the investor group would partner with refinery workers, who would have an ownership stake through an Employee Stock Ownership Plan (ESOP).
"Our preference is to have Premcor involved in some form of the financing going forward," Baccarini told the publication. "If not, we have alternative financing available."
Prior to this offer, Premcor had talked to the Southwestern Illinois Development Authority (SWIDA) about granting $100 million in bonds to make improvements needed for the refinery to produce fuels that meet new gasoline and diesel fuel specifications mandated by the federal Environmental Protection Agency by 2004.
After Premcor opted against the upgrades, SWIDA started to contact potential buyers, said authority Executive Director Joe Behnken. He added that SWIDA could work with the investor group concerning bond issuances and help with finding outside financing to underwrite major capital upgrades and be exempt from both federal and state taxes.
Under the proposed offer, W. Glenn Yarborough, a 62-year-old retired chairman and CEO at the defense supply firm Allied Research Corp. in Vienna, Va., would chair the new company while Claude Tenday, 53, an investment banker in Philadelphia, would be chief executive and Baccarini, 34, would be chief administrative officer and chief financial officer. None has refining experience; rather, they would rely on the refinery's existing crew to produce a profitable operation.