Press release from CNW Group
Parkland Fuel Corporation Divests Long-Haul Transportation Division to Strengthen Focus on Fuel Marketing
Friday, August 05, 2011
Parkland Fuel Corporation Divests Long-Haul Transportation Division to Strengthen Focus on Fuel Marketing17:10 EDT Friday, August 05, 2011RED DEER, AB, Aug. 5, 2011 /CNW/ - Parkland Fuel Corporation ("Parkland" or the "Corporation") (TSX: PKI), Canada's largest independent fuel distributor and marketer, today announced its binding agreement to divest the Petrohaul and Wiebe long-haul transportation businesses to Seaboard Liquid Carriers Ltd. ("Seaboard") for $23.5 million, subject to closing conditions. The transaction is expected to be accretive to both parties and will allow Parkland to more efficiently deploy capital and resources in the area of fuel marketing.Parkland has also entered into a multi-year service agreement with Seaboard for distribution services in the markets previously served by Petrohaul and Wiebe, which currently account for less than one third of Parkland's long-haul transportation in Canada."Parkland's growth has made us one of the largest purchasers of petroleum transportation services in Canada, which generally allows us to secure competitive long-haul fuel distribution agreements that assure reliable delivery across our markets," said Bob Espey, Parkland's President and Chief Executive Officer. "Given the advantages we have realized with our increased size, we identified the need to divest the long-haul transportation division to a strategic partner. Seaboard, with their core focus and competency in long-haul fuel transportation and track record of reliability, is the right partner. The divestiture, combined with a multi-year service agreement with Seaboard, will allow us to invest more capital in our core business of fuel marketing."The divestment of Petrohaul and Wiebe Transportation includes a significant number of tractors, tanks, trailers and light trucks, as well as several properties in Northern Alberta. As a result, there will be a corresponding reduction in Parkland's maintenance capital requirements and associated overhead costs. As the Petrohaul and Wiebe teams are remaining intact, the divestment will have minimal impact on customers that depend on this group for transportation.The multi-year service agreement with Seaboard includes clearly defined service standards to ensure Parkland maintains or improves the reliability of its fuel distribution network.About Parkland Fuel CorporationParkland Fuel Corporation is Canada's largest independent marketer and distributor of petroleum products, managing a nationwide network of sales channels. We are Canada's local fuel company, delivering gasoline, diesel fuel, lubricants, heating oil and other products to businesses, consumers and wholesale customers by community based operators who care.About Seaboard Liquid CarriersSeaboard is a leading Canadian bulk liquid carrier specializing in the transportation of petroleum products. The Company operates a diversified portfolio of transportation companies and brands across Canada and into the USA. Seaboard strives to provide safe, reliable, professional transportation services to a large and wide ranging international customer base.For further information: For investor and media inquiries please contact Tom McMillan, Investor Relations Manager at email@example.com or 1-800-662-7177 ext 6722.