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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 29, 1998
TESORO PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-3473 95-0862768
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
8700 TESORO DRIVE, SAN ANTONIO, TEXAS 78217-6218
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 210-828-8484
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 29, 1998, Tesoro Petroleum Corporation ("Tesoro" or the "Company")
completed the acquisition (the "Hawaii Acquisition") of all of the outstanding
capital stock of BHP Petroleum Americas Refining Inc. and BHP Petroleum South
Pacific Inc. (together, "BHP Hawaii"), both of which were affiliates of The
Broken Hill Proprietary Company Limited ("BHP"). The acquisition includes a
95,000 barrel per day ("bpd") refinery in Kapolei, Hawaii, on the island of
Oahu, approximately 20 miles west of Honolulu, and 32 (two of which are owned,
but dealer operated) retail gasoline stations on Oahu, Maui and Hawaii.
Tesoro paid $243.5 million in cash at closing for the acquisition, including
$68.5 million for estimated working capital, which is subject to post-closing
adjustments to reflect actual net working capital at closing. In addition,
Tesoro issued an unsecured, non-interest bearing promissory note (the "BHP
Note") in the amount of $50 million for the Hawaii Acquisition, which is payable
in five equal annual installments, beginning on the eleventh anniversary date of
the closing. The BHP Note provides for earlier payment if the future financial
performance of BHP Hawaii exceeds certain thresholds.
To ensure the continuity of crude supply to the Hawaii refinery, the Company
also entered into a two-year agreement with an affiliate of BHP to assist Tesoro
in acquiring crude oil feedstock sourced outside of North America and arranging
for transportation of such crude oil to the Hawaii refinery.
To finance the cash consideration paid in the Hawaii Acquisition, the Company
entered into a senior secured interim credit facility (the "Interim Credit
Facility") provided by Lehman Commercial Paper, Inc., an affiliate of Lehman
Brothers Inc. (which served as a financial advisor to the Company in connection
with the Hawaii Acquisition). The Interim Credit Facility is comprised of a term
loan facility aggregating $750 million and a revolving credit facility in the
amount of $350 million. The Interim Credit Facility is guaranteed by
substantially all of the Company's active direct and indirect subsidiaries
(collectively, the "Guarantors"), and is secured by substantially all the
domestic assets of the Company and each of the Guarantors.
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ITEM 5. OTHER EVENTS
Washington Acquisition
On May 1, 1998, Tesoro entered into a stock purchase agreement (the "Washington
Agreement") to purchase (the "Washington Acquisition") all of the outstanding
capital stock of Shell Anacortes Refining Company ("Shell Washington"), an
affiliate of Shell Oil Company ("Shell"). Shell Washington owns and operates a
108,000 bpd refinery (the "Washington Refinery") located in Anacortes,
Washington (on the Puget Sound, approximately 60 miles north of Seattle).
Under the terms of the Washington Agreement, the Company has agreed to pay at
closing a purchase price of $237 million plus estimated working capital as of
closing. The Company has made a $5 million earnest money deposit and has agreed
to deposit in escrow by June 30, 1998, the balance of the purchase price. The
Washington Agreement contains representations and warranties and other general
provisions that are customary for transactions of this nature.
Shell is selling Shell Washington pursuant to agreements with the U.S. Federal
Trade Commission (the "FTC") and the states of Oregon and Washington (the
"States") resulting from its western states refining and marketing joint venture
with Texaco. The closing of the Washington Acquisition is contingent upon the
approval of the FTC and the States and other customary conditions. Tesoro
currently anticipates that the Washington Acquisition will close on or after
August 1, 1998.
Private Placement
Pursuant to Rule 135c of the Securities Act of 1933, as amended, attached
hereto as Exhibit 99.2 and incorporated herein by reference is a press release
by Tesoro Petroleum Corporation announcing plans to offer Senior Subordinated
Notes in a private offering.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
The combined financial statements of BHP Petroleum
Americas Refining Inc. and BHP Petroleum South Pacific
Inc. have been previously filed in a Current Report on
Form 8-K dated May 13, 1998.
Included as Exhibit 99.1 to this Form 8-K are the
audited balance sheets of Shell Anacortes Refining
Company as of December 31, 1996 and 1997 and the
related statements of income, stockholders' equity and
cash flows for the period from inception (January 4,
1996) through December 31, 1996 and the year ended
December 31, 1997 and the unaudited balance sheets of
Shell Anacortes Refining Company as of March 31, 1998
and the related statements of income and cash flows for
the three months ended March 31, 1997 and 1998.
(b) PRO FORMA FINANCIAL INFORMATION
Unaudited pro forma combined condensed financial
statements of the Company and BHP Petroleum Americas
Refining Inc. and BHP Petroleum South Pacific Inc. have
been previously filed in a Current Report on Form 8-K
dated May 13, 1998.
(c) EXHIBITS
*2.1 Stock Sale Agreement, dated May 1, 1998, among the
Company, Shell Anacortes Refining Company and Shell
Refining Holding Company (incorporated by reference to
the Company's Form 10-Q for the period ended March 31,
1998)
+12.1 Computation of Ratio of Earnings to Fixed Charges.
+23.1 Consent of Price Waterhouse LLP.
+23.2 Consent of Arthur Andersen LLP.
+23.3 Consent of Netherland, Sewell & Associates, Inc.
+99.1 Audited Financial Statements of Shell Anacortes
Refining Company as of December 31, 1996 and 1997 and
Unaudited Financial Statements of Shell Anacortes
Refining Company as of March 31, 1998.
+99.2 Press release issued by Tesoro Petroleum Corporation
on June 1, 1998.
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* Previously filed.
+ Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TESORO PETROLEUM CORPORATION
REGISTRANT
Date: June 5, 1998 By: /s/ JAMES C. REED, JR.
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James C. Reed, Jr.
Executive Vice President,
General Counsel and Secretary
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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*2.1 Stock Sale Agreement, dated May 1, 1998, among the
Company, Shell Anacortes Refining Company and Shell
Refining Holding Company (incorporated by reference to
the Company's Form 10-Q for the period ended March 31,
1998)
+12.1 Computation of Ratio of Earnings to Fixed Charges.
+23.1 Consent of Price Waterhouse LLP.
+23.2 Consent of Arthur Andersen LLP.
+23.3 Consent of Netherland, Sewell & Associates, Inc.
+99.1 Audited Financial Statements of Shell Anacortes
Refining Company as of December 31, 1996 and 1997 and
Unaudited Financial Statements of Shell Anacortes
Refining Company as of March 31, 1998.
+99.2 Press release issued by Tesoro Petroleum Corporation
on June 1, 1998.
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* Previously filed.
+ Filed herewith.
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