HONOLULU (AP) - Tesoro Corp. said Monday that it has agreed to sell its refining operations in Hawaii to Par Petroleum Corp. for $75 million plus the market value of its working capital.
The San Antonio, Texas-based company said that Par Petroleum agreed to continue running Tesoro Hawaii LLC as a refining, logistics and retail operation.
The deal, which is expected to close in the third quarter, comes after Tesoro told Hawaii state officials in May that it would lay off 165 workers at the Kapolei refinery. Those layoffs were set to begin this week after initial notices were sent out earlier this month.
Tesoro said it expects the market value of its working capital to be between $225 million and $275 million.
"While the Hawaii operations do not align with our strategic focus, we believe they offer a great opportunity for Par Petroleum," Tesoro CEO Greg Goff said in a statement.
U.S. Rep. Colleen Hana-busa, D-Hawaii, praised the sale and said that she hopes it will help prevent job losses.
"I look forward to learning more about Par Petroleum and their intentions, practices and philosophy," Hanabusa said. "My hope is that they will grow to be a part of our community."
Democratic U.S. Sen. Brian Schatz said that the operation is a critical part of Hawaii's economy.
"This will help with the availability of jet fuel, diesel fuel and other refined products," Schatz said.
Par Petroleum is based in Houston and has several energy-related assets. Its stock rose 4 cents, or 2.7 percent, to $1.55 on Monday.
Par Petroleum said its board unanimously approved the purchase, and that the company's retail gas stations would remain under the Tesoro brand.
"This is a great fit for Par Petroleum and we are pleased to make a long-term investment in Hawaii's economy," Par Petrolem CEO Will Monteleone said.
The company said the deal would be financed by issuing $200 million in common stock and other funding.