SAN ANTONIO (AP) — NuStar Energy LP said Friday that it agreed to sell a 50 percent stake in its asphalt operations to an investment firm for $175 million.
The deal creates a joint venture between the San Antonio-based pipeline operator and asphalt refiner and Lindsay Goldberg LLC, with each company getting a 50 percent voting interest. The deal is expected to close by the end of September.
As a result of the sale, NuStar said it expects to take a non-cash charge in the second quarter, but did not say how large it would be. And partially as a result of that charge, NuStar said it expects its second-quarter earnings before interest, taxes, depreciation and amortization to come in significantly lower than the $160 million it posted in the same quarter of 2011.
NuStar said the sale allows it to monetize part of its asphalt operations, while maintaining a 50 percent stake in the business that could generate significant cash as the economy improves. The company said it plans to use the proceeds to pay down a large portion of its debt.
Michael Pesch, who currently serves as NuStar’s vice president for regional operations, will become the joint venture’s chief executive. NuStar said its Paulsboro, N.J., and Savannah, Ga., refineries and related inventory will be transferred into the joint venture.
NuStar shares fell 44 cents to $53.49 in afternoon trading Friday. Its shares have fallen 14 percent since early March.
