Sprague Operating Resources LLC, a subsidiary of Sprague Resources, has closed on the acqusition of a petroleum storage terminal and Wilkesbarre Pier in East Providence, Rhode Island. The $23 million purchase encompasses a combined distillation storage capacity of just over 1 million barrels and has been leased exclusively by Sprague since May 1, 2014. Sprague bought the facility from Capital Properties, which expects to use proceeds from the sale, net of income taxes, to redeem its 5% dividend notes due December 26, 2022.
Robert H. Eder, Chairman of Capital Properties, said that “the changing nature of the distillate market in southeastern New England requires the conversion of a significant portion of the terminal’s capacity to gasoline products, which would involve significant capital investment and substantial additional risk. The company’s board of directors determined that it was in the company’s and its shareholders’ best interest to divest these assets rather than undertake the conversion.”
