Vertex Energy, Inc., an environmental services company that recycles industrial waste streams and off specification commercial chemical products, has announced that it has sold its Nevada re-refinery facility, located in Churchill County, to Clean Harbors, Inc. for US$35 million, of which approximately US$14 million was immediately used at closing to purchase the facility and equipment previously leased by Vertex Energy in order to facilitate such sale.
Benjamin P. Cowart, Chairman and CEO of Vertex Energy, said, "This transaction benefits Vertex Energy in a variety of ways, not the least of which is by strengthening our balance sheet. As we noted in our third quarter Form 10-Q filing and on the conference call that followed, the Churchill County facility had an average carrying cost of US$1.5 million per quarter. We eliminate those costs with this transaction. At the end of 3Q15, our cash and cash equivalents were over US$4 million. This sale and related transactions will bring that cash position to more than US$10 million. We also used US$16 million of sale proceeds to pay down our term debt."
Cowart added, "While the sale of our re-refinery in Nevada will lessen our footprint in the western US, the swap agreement and base oil agreements that were entered into as part of the sale should allow us to improve logistic costs and provide us with a long term off-take agreement for base oil and finished lubricants to support our business strategy going forward.”
Cowart concluded, “We intend to put this cash to work both in reducing our long term debt and in making opportunistic acquisitions. As of the end of 3Q15, the amount of our term debt owed to Goldman Sachs stood at US$23.2 million. We have used US$16 million of the funds from the Nevada sale to pay down and service that debt, lowering the amount owed to approximately US$7 million and our total long term debt to approximately US$14 million. Additionally, moving forward, we intend to expand our street collections of used oil through acquisitions, thereby decreasing our reliance on third-party purchases. We also anticipate seeing an increase in our margins by moving from third-party purchases to our own collections.”
Clean Harbors’ Chief Operating Officer Eric W. Gerstenberg said, “The Nevada facility is strategically located and aligns with our plans to increase our re-refining presence in California and other West Coast lubricant markets. As we pursue our closed loop direct sales strategy, this plant provides an opportunity to scale our blended operations in the Western US where we currently have no capability. We are confident that the facility will complement our existing re-refining network through transportation efficiencies, additional storage and processing capabilities.”
Adapted from press release by Francesca Brindle
Read the article online at: https://www.hydrocarbonengineering.com/refining/04022016/clean-harbors-purchases-nevada-refinery-from-vertex-energy-2370/