News Release - September 26, 2007
FEDERATED CO-OPERATIVES TO PURCHASE CIC’S INTEREST IN NEWGRADE UPGRADER
Federated Co-operatives Ltd. (FCL), has notified Crown Investments Corporation (CIC) that Consumers' Co-operative Refineries Ltd. (CCRL), a wholly owned subsidiary of FCL, will purchase CIC's 50 per cent interest in NewGrade Energy Inc., becoming the sole owner of the Regina heavy oil upgrader.
CIC announced on September 5, 2007 that it had reached an agreement with a third party to purchase CIC's interest in NewGrade for $325 million plus dividends on 2006-07 earnings. The agreement was subject to FCL's right of first refusal.
"FCL intends to exercise its right of first refusal, which means it will match the offer we had received from the third party," CIC Minister Judy Junor said. "CIC officials will now work with FCL to complete the details of the transaction. We expect that to occur before the end of 2007."
The NewGrade upgrader processes heavy crude oil into synthetic crude oil. It was built in 1988 and began operation in November of that year. CIC and CCRL, a wholly owned subsidiary of FCL of Saskatoon, had each held a 50 per cent interest in NewGrade. CCRL operated the upgrader in conjunction with its oil refinery.
"As we said three weeks ago, we have accomplished the original goals of the NewGrade investment and we will receive fair market value for CIC's interest," Junor said. "It is gratifying that we will be able to use $320 million from the sale of a non-renewable resource to capitalize the new Green Future Fund, which will invest in initiatives that will address the climate change challenge and build a sustainable environmental future for Saskatchewan people."
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