Board determines CVR Energy will focus on renewable fuels, funds renewable diesel projects
CVR Energy Inc.’s board of directors has determined that the company is no longer interested in acquiring another crude oil refinery and instead will focus on renewable fuels. As a result, the board has approved expenditures of up to $10 million to move its renewable diesel projects forward. These projects include the completion of process design to convert an existing hydrotreater for renewable diesel manufacturing at its Coffeyville refinery in Kansas, and completion of process design and ordering long lead-time equipment for a feedstock pretreatment unit for the Wynnewood refinery in Oklahoma to process cheaper, lower carbon intensity material. Design of the pretreatment unit could be expandable to also process feedstock for the potential Coffeyville refinery renewable diesel conversion.
“For the past few years, we have explored a number of refining acquisitions in PADD 4 and elsewhere,” said Dave Lamp, CEO. “However, given our unwillingness to overpay for assets and our belief that the industry is pivoting towards renewable fuels, we are electing to focus our capital on sustainable initiatives. As a result of the board’s determination to cease efforts to acquire another refinery, we have excess cash on our balance sheet. We are earning very little on this cash and, when we issued our bonds, we bargained for covenant capacity, which will be expiring shortly, to make a distribution of up to $492 million to our stockholders. Because we believe it would be a benefit to our stockholders to exercise this option before it expires, we are announcing today a special dividend consisting of cash and Delek shares.”
The board has approved a special dividend of $492 million, to be payable in a combination of cash and the outstanding stock of Delek US Holdings Inc. currently held by the company. The special dividend will be paid on June 10 to those who hold stock at close of market May 26.
“Delek made it very clear over the past several months that it had little interest in engaging with us as its largest stockholder,” Lamp said. “This special dividend should allow us to monetize a gain on our investment in Delek—which would be nearly $116 million based on Delek’s closing stock price on May 10—and distribute our Delek shares to our stockholders, with whom Delek may be more willing to meaningfully engage.”
For more information on the special dividend, click here.