Vertex Energy, Inc. (VTNR) stock plummeted 6.11% in the pre-market trading session at the price of $8.14 despite no fundamental developments.
VTNR is a power transition firm that produces and distributes traditional and advanced fuels. It is the leading supplier of energy that owns product storage of 3.2M barrels. The company is also the largest processor and refiner of used engine oil in the United States, with operatories in Columbus and Marrero. Vertex delivers Group III and Group II+ Base Oils to the petroleum manufacturing markets across North America.
VTNR Completed Refinery Acquisition
On 1st April 2022, VTNR reported completing the earlier announced purchase of the Alabama and Mobile refinery from several sellers. The base purchase price of the acquisition was US$75M combined with US$25M for capital expenses. At the closure, VTNR acquired a hydrocarbon inventory of roughly US$165M from Shell, funded via an intermediation agreement.
In conjunction with the transaction, Vertex ended a previously reported senior secured loan of US$125M with a group of lenders. Moreover, VTNR entered a “supply and offtake agreement” with Macquarie to manage the working capital and inventory requirements. The deal will supply Macquarie with the ability to contain the renewable products and feedstocks at the Mobile refinery by Q1 of 2023.
The management expects its refined product margins on traditional fuels production to remain at higher levels in 2022. The company intends to enter 2023 to layer on the economic benefit of diesel fuel production. It will help them create more value for the company’s shareholders.
In a nutshell, Vertex is a small growth firm working as an environment-friendly niche with a market cap of US$500M. Over the last year, the company’s strategic standings had a complete mixture of good and bad results. The completion of the recent refinery purchase from Shell will help accelerate Vertex towards the growth front.