CALGARY, June 4 /CNW/ - After more than 11 months seeking a suitable buyer for the Montreal East Refinery, Shell Canada Products (Shell) today announced that this process has been unsuccessful and that it will now proceed with converting the refinery to a terminal. The decision comes after considerable effort to market the refinery, including a cooperative effort with a Special Committee, led by Michael Fortier and supported by the Government of Quebec, to identify and approach potential purchasers. Although this effort resulted in two expressions of interest, there was a significant valuation gap and Shell will no longer pursue discussions with the interested parties.
"While we will not get into details about the expressions of interest or parties involved, we have informed the parties, the government and our employees that we will not be continuing discussions for the reason that we are too far apart on some of the terms put forward to realistically reach an agreement on the sale of the refinery," said Lorraine Mitchelmore, Shell Canada President and Country Chair. "Therefore, we will continue with our plans to convert the refinery in to a terminal."
"Today's announcement reflects our strategy to divest non-core assets, while making selective investments to enhance Shell's competitive position," said Mark Williams, Downstream Director. "Although we will be closing the refinery, conversion to a terminal will ensure we continue to supply the Montreal market with Shell's innovative products. I also want to thank the employees of the Montreal East Refinery for their dedication during this time of uncertainty"
The decision comes after a six-month time period between July 2009 and January 2010, during which Shell reviewed a number of options for its Montreal East Refinery. This review was comprehensive and involved significant efforts to market the facility to a number of parties. Despite these significant efforts no parties expressed an interest in purchasing the refinery during this time and so Shell announced its intention to convert the refinery in January.
Since February, Shell has been cooperating with a Special Committee, led by Michael Fortier and supported by the Government of Quebec, who have been identifying and approaching potential purchasers. Shell's cooperation has included significant discussions with interested parties and providing access to a detailed electronic data room for qualified potential purchasers. This was part of a commitment Shell made with the Government of Quebec in February to consider credible offers if tabled by June 1, 2010.
"We would like to sincerely thank the members of the Special Committee for the time and efforts they have made to identify and encourage potential purchasers to come forward," said Mitchelmore.
SOURCE Shell Canada Limited
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