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Husky Energy strikes deal to sell oil refinery to Tidewater Midstream for C$215M

Husky Energy Inc. entered into an agreement with Tidewater Midstream & Infrastructure Ltd. to sell its Prince George refinery for C$215 million, and a contingent payment of up to C$60 million over two years, according to an Oct. 4 news release.

Husky previously said selling the refinery is a step toward focusing on its integrated corridor and offshore businesses. The integrated corridor includes upstream thermal crude oil production, pipeline capacity and refineries, while the offshore business focuses on oil and gas production.

According to a separate same-day news release, Tidewater would finance its acquisition of the refinery by increasing its credit facility up to C$600 million, in addition to a C$100 million second-lien term loan. The 12,000 barrel-per-day Prince George light oil refinery has a storage capacity of more than 1 million barrels and mainly produces low-sulfur diesel and gasoline.

As part of the deal, which is scheduled to close in the fourth quarter, Husky entered into a five-year off-take agreement with Tidewater for 90% of the refinery's nameplate capacity on diesel and gasoline volumes.

TD Securities Inc. is acting as the financial adviser, while Torys LLP is acting as the legal adviser to the transaction.