Vertex posts Q2 net loss of $16M, plans to secure financing for Mobile refinery by Sept. 30
In its second-quarter financials, Vertex Energy Inc. said it expects to have a definitive funding source in place by Sept. 30 to finance the company's $75 million acquisition of the Mobile refinery in Alabama to be purchased from subsidiaries of Royal Dutch Shell. Vertex announced plans to purchase the refinery in May.
The company says it is in advanced discussions with multiple potential lenders. Meanwhile, it posted a net loss of $16 million in the second quarter, with $1.6 million in income from operations and an adjusted EBITDA of $4 million, an increase of $9.4 million from second quarter 2020.
Vertex reiterated intentions for two capital projects associated with the Mobile refinery acquisition, including an $85 million conversion of the site’s hydrocracking unit to produce more than 150 million gallons a year of renewable diesel and a $40 million investment to develop a pretreatment unit at Vertex’s Myrtle Grove complex in Belle Chase, Louisiana.
Provided closing on the Mobile refinery goes according to plan and funding is secured, Vertex anticipates the hydrocracker conversion in Mobile to be complete by mid-2022 and the pretreatment unit in Belle Chase by the end of 2023.
“We remain on track to complete the acquisition of the Mobile refinery during the fourth quarter 2021,” said Benjamin Cowart, president and CEO of Vertex. “We are currently in advanced discussions with established lending partners that remain highly supportive of the transaction. We expect to secure financing for the Mobile refinery acquisition on or before the end of the third quarter 2021. “By year-end 2021, Vertex Is positioned to become a pure-play refiner and marketer of renewable and conventional feedstocks. Our streamlined asset portfolio, simplified capital structure and strategic focus on energy transition opportunities will represent a wholesale transformation of our investment thesis, one that we believe positions us to create measurable value for our shareholders as we enter this next, important phase of growth. We are structuring Vertex to become an energy transition company of scale, one focused on driving profitable growth through high-return organic and inorganic investments. We look forward to providing additional updates on our progress over the coming months.”