TORONTO, May 12, 2014 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) announced today that it has entered into an agreement to sell its Montreal East business to Suncor Energy Products Inc. for approximately $120 million. The business, which for a number of years provided services to other refineries in the Montreal area, now provides sulphur removal and compliance services only to Suncor's Montreal refinery. Chemtrade acquired the operation in 2011 as part of its acquisition of Marsulex, and will realize a gain of approximately $24 million on the sale. Chemtrade will also recognize the remaining amounts receivable (approximately $11 million) pursuant to an agreement with a previous customer of this facility. Chemtrade will also continue to market sulphur and sodium bisulphite produced by the Montreal plant. Chemtrade will use the net proceeds of the sale to reduce debt. The sale, which is subject to normal closing conditions including compliance with the Competition Act, is expected to close in June.
Mark Davis, President and Chief Executive Officer of Chemtrade, said "It was the right time for us to sell the operation to Suncor, as owner of the sole refinery being served by our Montreal facility. The sale price represents essentially the same multiple we paid as part of the Marsulex transaction almost three years ago. Additionally, using the net proceeds to reduce debt improves our debt to EBITDA ratio following the recent acquisition of General Chemical, and the on-going marketing agreements will continue to generate revenue for Chemtrade.
"Operationally, the Montreal facility is in excellent shape and Suncor is gaining a skilled team that has provided outstanding service for many years. We thank them for their dedication and commitment to operational excellence."
Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America's largest suppliers of sulphuric acid, inorganic coagulants for water treatment, liquid sulphur dioxide, sodium nitrite and sodium hydrosulphite. Chemtrade is a leading processor of spent acid as well as a leading regional supplier of sulphur, sodium chlorate, phosphorus pentasulphide, and zinc oxide. Additionally, Chemtrade provides industrial services such as processing by-products and waste streams.
Caution Regarding Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking statements within the meaning of certain securities laws, including the Securities Act (Ontario). Forward-looking statements can be generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "expected", "intend", "may", "will", "project", "plan", "should", "believe" and similar expressions. Specifically, forward-looking statements in this news release include statements respecting certain future expectations about: the ability to close the transaction and the timing of closing; the use of proceeds from the sale and the ability to generate revenue from the marketing agreements. Forward-looking statements in this news release describe the expectations of the Fund and its subsidiaries as of the date hereof. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation the risks and uncertainties detailed under the "Risk Factors" section of the Fund's latest Annual Information Form and the "Risks and Uncertainties" section of the Fund's most recent Management's Discussion & Analysis.
Although the Fund believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon. With respect to the forward-looking statements contained in this news release, the Fund has made assumptions regarding: there being no significant disruptions affecting the operations of the Fund and its subsidiaries.
The Fund disclaims any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.
Further information can be found in the disclosure documents filed by Chemtrade Logistics Income Fund with the securities regulatory authorities, available at www.sedar.com.
SOURCE: Chemtrade Logistics Income Fund
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